Oil is swinging against the backdrop of the US-China differences and the Corona outbreak

Oil is swinging against the backdrop of the US-China differences and the Corona outbreak

Oil prices bounced a little higher after falling in early trading on Monday, with Brent crude currently trading at $ 44, up 0.5%, compared to $ 41.5 a barrel for US crude, up 0.6%.

Oil prices are under pressure from deteriorating relations between Washington and Beijing, as well as the continued spread of Corona Corvid 19 virus worldwide.

The Chinese authorities took control of the American consulate in Chengdu and the evacuation of American nationals from it, today, Monday, as tensions between the United States and Britain continued at the same time, as second waves of the epidemic flow from Spain to China, casting new potential clouds on the expectations of oil demand, despite The increase in the number of cases of HIV infection is declining.

It appears that the return of the equilibrium to the oil market has stopped temporarily in the last sessions.

Oil has been trading in a narrow range near $ 40 a barrel since early June, after its rapid recovery from its lowest levels in April faded, as many countries struggle to control the Corona Covid 19 virus.

The dollar's decline also supported oil prices this month, although investors are preparing for new supplies from the OPEC + alliance when it eases production restrictions in August.

OPEC + agreed to a record cut of oil production of 9.7 million barrels per day as of May 1, to offset the impact of lower prices and demand due to the Corona virus crisis, and the agreement was extended by a large reduction for a period of one month to the end of this July, before the reduction is reduced in August To 7.7 million barrels per day.

"The risks of a less robust recovery for oil demand due to the coronavirus, and political tensions between the United States and China, are weighing on prices," Carsten Fritsch, an analyst at Commerzbank AG, told Bloomberg. "On the other hand, prices find support from the weak US dollar."

Analysts at the "Goldman Sachs Group" wrote in a report that the pace of recovery in global oil demand is slowed to less than a million barrels per day from August to December, and they are likely to leave this stalled return the price of oil in a fixed range in the second half of the year .

There is also evidence that crude oil production in North America is starting to recover, as U.S. production rose for the first time since March of the week to July 17 after correcting the impact of Tropical Storm Cristobal, which tore the Gulf of Mexico in June, while Baker Hughes data showed Friday released the first expansion of drilling in American fields in 4 months.

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