Oil rises more than 2% on firm yuan, expectations of more OPEC cuts

Thu 08 Aug 2019 19:51 GMT | 23:51 Local Time

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Oil jumped more than 2% on Thursday on expectations that falling prices could lead to production cuts, coupled with a steadying of the yuan currency after a week of turmoil spurred by an escalation in U.S.-China trade tensions, APA reports quoting Reuters.

Brent crude LCOc1 ended the session up $1.15, or 2.1%, at $57.38 a barrel, after hitting a session high of $58.01.

U.S. West Texas Intermediate (WTI) crude futures CLc1 rose $1.45, or 2.8%, to settle at $52.54 a barrel after hitting a peak of $52.98.

Prices rebounded after tumbling nearly 5% to their lowest since January on Wednesday after data showed an unexpected build in U.S. crude stockpiles after nearly two months of decline.

Lending some support to prices on Thursday, inventories at Cushing, Oklahoma, the delivery point for WTI, fell about 2.9 million barrels in the week to Aug. 6, said traders, citing data from market intelligence firm Genscape.

China’s yuan strengthened against the dollar and its exports unexpectedly returned to growth in July on improved global demand despite U.S. trade pressure. The dollar fell 0.2% against the offshore yuan.

“Today’s price rebound across the energy spectrum looks like a normal correction from a short-term oversold technical condition,” Jim Ritterbusch of Ritterbusch and Associates said in a note.

“While some Saudi overtures of additional output restraint, a softening U.S. dollar, and lift in global risk appetite are facilitating today’s rally, we are not viewing this as the beginning of a sustainable advance by any measure.”

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