Oil heads for biggest weekly loss in 2019 on global economy concerns

Global oil prices continued to rise as the US market opened on Friday to recover some of yesterday's heavy losses as it hit its lowest level in two months. The current recovery comes on the support of hopes for an end to the US-China trade war after recent statements by US President Donald Trump, whilst prices continue to suffer the biggest weekly loss in 2019, fueled by global economic concerns and oversupply in the United States.

By 12:25 GMT, US crude rose to $58.55 a barrel from the opening level of $58.20, with a high of $58.72 and a low of $57.98.

Brent crude rose to $68.53 a barrel from the opening price of $67.94 and hit a high of $68.82 and a low of $67.90.

US crude closed yesterday down by 5% in its third consecutive daily loss and the highest loss of the year, recording a 2-month low of $57.32 a barrel, and Brent crude futures fell by 4% after hitting $57 a barrel, the lowest since March 28th.

Prices fell broadly after very weak economic data in the United States, reflecting a sharp decline in the growth of the world's largest economy, with the United States currently engaging in a fierce trade war with China.

The initial reading of the US manufacturing activity showed the weakest pace of growth in almost a decade during May, in a strong sign of a sharp slowdown in economic growth in the second quarter of this year.

US President, Donald Trump, said on Thursday that the US complaints against Huawei could be resolved as part of a US-China trade deal.

The comments renewed market hopes that the trade war between the world's two largest economies could end quickly, ending a year-long war that would greatly improve the outlook for the global economy and hence expectations for fuel demand levels.

Over the course of the week, global oil prices have lost an average of 8% so far, heading towards the fourth weekly loss in five, and the highest weekly loss for this year.

That big loss was fueled by the rising concerns over the global economic slowdown, after weak US data, and the US-China trade war continuing, as well as global economic concerns over the supply in the United States.

The US Energy Administration (EIA) announced on Wednesday that the country's trade inventories rose by 4.7 million barrels in the week ending May 17, which is the second weekly increase in a row, contrary to experts' expectations of a 1.2 million barrel drop.

According to these data, total US commercial inventories rose to 477.1 million barrels, the highest level since July 2017, in a negative sign of demand levels in the world's largest oil consumer.

As for the US oil production, it increased last week by about 100 thousand barrels per day, which is the first increase in the last three weeks, bringing the total to 12.2 million barrels per day, and approaching the highest level ever at 12.3 million barrels.