Oil hovers near 6-month high as dollar falls in first session of 3

Crude oil futures fluctuated in a tight range, showing a mixed performance during the Asian session, as Nymex crude bounced off its highest price since late October in the third consecutive session, while Brent crude stabilized near its highest since November, amid the fall of the dollar index, showing a drop in the second session from its highest since May 16th, 2017. according the inverse relationship between them and on the threshold of developments and economic data expected today, Thursday, by the US economy, the largest producer and consumer of oil globally.

As of 03:53 GMT, Nymex crude futures (June 15th delivery) fell 0.03% to trade at $65.79 per barrel compared to the opening at $65.81 a barrel. While Brent crude futures (June 15th delivery) rose 0.09% to trade at $74.60 per barrel compared to the opening at $74.53 per barrel, amid the fall of the US dollar index by 0.06% to 98.04 compared to the opening at 98.10.

Investors are looking for the US economy to reveal the reading of durable goods orders, which account for about half of consumer spending, and accounts for more than two-thirds of the US GDP, which could reflect a 0.7% rise from 0.3% in February. While the core reading of the index itself rose 0.2% from 0.1% in February.

This comes in conjunction with the reading of the index of jobless claims, which may show a rise of 7,000 applications to 199,000 applications during the week ending last Saturday. The ongoing jobless claims index may also show a 29,000 increase in demand to 1,682,000 in the week ending on the 13th of this month. This comes before we witness the US Treasury Department's semi-annual report on the international economic and exchange rates.

In contrast, the US Energy Information Administration (EIA) report on oil inventories yesterday showed a surplus of 5.5 million barrels in the week ending on the 19th of this month, compared to a deficit of 1.4 million barrels in the previous weekly reading, exceeding expectations of a surplus of 0.9 million barrels, witnessing inventories rise to 460.6 million barrels heading back to the average of the past five years for this time of the year.

In the same context, the report of the US Energy Information Administration showed that the inventories of motor fuel in the United States, the largest consumer of energy globally, fell by 2.1 million barrels, inventories are now 2% less than the average for the past five years for this time of year, and stocks of distillate derivatives, including heating fuel also fell by 0.7 million barrels, inventories are now 6% lower than the average of the past five years for this time of year.

White House Press Secretary and Spokeswoman, Sarah Sanders, said on Tuesday that the United States Trade Representative, Robert Lighthizer, and the United States Secretary of the Treasury, Steven Mnuchin, will travel to Beijing by the end of this month for another round of trade talks and will meet Vice Premier of the People's Republic of China, Liu He, who will head a Chinese delegation that will visit Washington for further discussions and trade talks on May 8.

On the other hand, we have followed Saudi Oil Minister, Eng. Khalid Al-Falih, on Wednesday, said that the global oil inventories will guide his country on its next decision on oil supplies, adding that the global oil inventories are continuing to rise, so Saudi Arabia does not see the need for a quick reaction. Adding that the decision of the Kingdom will depend on the fundamentals of the global oil markets amid the continuous work on the stability and balance of oil markets.

This came hours after the Minister of Foreign Affairs of Saudi Arabia, Ibrahim Abdulaziz Al-Assaf, said on Tuesday, that Saudi Arabia, the world's third largest oil producer and the largest oil producer of the Organization of Petroleum Exporting Countries (OPEC) and the world's largest oil exporter of the organization, welcomes the suspension of Iran's oil exports exemptions, saying that the US decision was aimed at pushing Iran to halt its destabilizing policies in the region. He also said that the Iranian regime is always using the resources of the state to finance its dangerous policies in the Middle East region and that Saudi Arabia calls for continuing the international efforts to pressure Iran to comply with international law. He stressed that the Kingdom will continue its efforts to stabilize the global oil markets.

Foreign Affairs Minister of Iran, Mohammad Javad Zarif, said that it was in the interests of Iranian national security to keep the Strait of Hormuz open, saying that if the United States wanted to enter the Straits, it would have to talk to those who protect it, explaining that they're the the Iranian Revolutionary Guards. Adding that there would be consequences if the United States prevented his country from finding oil buyers and that he trusts his country to find buyers for the Iranian oil.

This came after the Iranian Oil Minister, Bijan Namdar Zangeneh's speech on Tuesday, that the United States of America is making a serious mistake in its attempts to lubricate oil, explaining that the United States is using oil as a weapon, adding that his country is seeking by all means to break the US economic sanctions against its oil exports and against countries that buy Iranian oil, whose exceptions will not be extended from the US economic sanctions by next month.

In the same context, the Chinese Foreign Ministry expressed its total and unequivocal rejection of the unilateral US economic sanctions against Iran, noting that the United States should respect China's cooperation with Iran, which serves the interests of the Chinese and Iranian sides. Adding that the Chinese government is committed to uphold the legitimate rights and interests of Chinese companies in their dealings with Iran.

The European Commission also criticized yesterday, in turn, the United States' decision to suspend exemptions from the application of Iranian sanctions, as well as imposing sanctions on Iranian oil importers. "We regret this decision and will continue to abide by the joint and comprehensive plan of action with Iran, as long as Iran is committed to the nuclear agreement" The European Commission's foreign affairs spokeswoman said.

US Secretary of State, Mike Pompeo, said that the United States had made its demands clear for Iran and that his country's discussions with its partners in the past few days had been about providing alternative offers, explaining Washington's intention to apply its economic sanctions without any exceptions to Tehran by next month. Adding that the Kingdom of Saudi Arabia and the United Arab Emirates in addition to his country will ensure stability and balance in oil supplies.

In the same context, US Secretary of State, Pompeo, noted that the United States will let Saudi Arabia and the United Arab Emirates to clarify the details of the oil supply. This came before the US President, Donald Trump, comments that Saudi Arabia and other countries in the Organization of OPEC will compensate more than the potential deficit due to US economic sanctions against Iran.

In another context, Saudi Oil Minister, Eng. Khalid Al-Falih commented on the US decision about not extending the waivers for China, India, South Korea, Japan, Turkey, Italy, Taiwan and Greece from its economic sanctions against the Iranian oil importers. That his country will be discussing with other countries and producers in the upcoming weeks to work on the balance and stability of oil markets amid work to ensure the stability of oil supplies in global markets.

On the contrary, The Libyan capital, Tripoli, suffered a series of air raids and bombings over the weekend, which also boosted oil prices earlier this week with concerns over the supply by one of OPEC's main oil exporters, with Libyan Military Marshal, Khalifa Hafater, directing his forces from the east of the country -which controls- to the capital, which is under the control of the government recognized by the United Nations.

We have also covered over the weekend, the disrupt of a major pipeline in Nigeria, one of the oil-exporting countries, which helped the Nymex crude to complete its gains for the eighth week in a row, the longest weekly rallies since the second quarter of 2015 and helped the Brent crude to complete its gains for the fifth consecutive week, marking its longest weekly gain streak since the last quarter of 2017.

We'd like to note that the official data we followed earlier this week by Saudi Arabia, the world's third-largest oil producer, OPEC's largest oil producer and the world's largest oil exporter and OPEC, showed that the Kingdom's exports dropped to 6.977 million barrels per day in February. Compared to 7.254 million barrels per day in January, which is also one of the factors that boosted the markets' concern about the oil supply.

According to the weekly report of "Baker Hughes", which was revealed last Thursday, due to the absence of the US market on Friday in observance of the "Good Friday" holiday, showed that the drilling rigs and oil exploration platforms in the United States declined by 8 to a total of 825 platforms during the week ending on April 19th, as the US oil production has recently stabilized at its highest level ever at 12.1 million barrel per day.