Amid a fresh trade spat between United States and China, oil prices witnessed another fallout, with Brent Crude reduction at $26.37.
Media reports said Brent crude was down 7 cents, or 0.3 percent, at $26.37, while US West Texas Intermediate (WTI) crude fell 39 cents, or 2 percent, to $19.39.
While global oil demand is expected to recover modestly from April lows as countries ease some lockdown measures, the excess amount created over months in storage facilities will loom over the markets. The Wall Street bank raised its 2021 forecast for global benchmark Brent to $55.63 per barrel from $52.50 earlier. The bank hiked its estimate for WTI to $51.38 a barrel from $48.50 previously.
Oil prices recovered some of their losses after US Treasury Secretary Steven Mnuchin said he expected China to make good on its trade agreement with the US. He also said he expected oil markets to rebound, and that the Trump administration was looking for more storage capacity.
Concerns about weak manufacturing data in Asia and Europe, assessed by Purchasing Managers’ Index (PMI) of manufacturing companies, also put pressure on oil prices. In Asia, a series of PMIs from London–based global information provider IHS Markit fell deeper into contraction from March, with some diving to all-time lows and others hitting levels last seen during the 2008-2009 global financial crisis.
The US dollar surged against most major currencies on Monday amid fears that last year’s US-China dispute will be re-ignited.
Earlier President of the United States Donald Trump has given an ultimatum to Saudi Crown Prince Muhammad Bin Salman, either to cut oil or lose US military support.