Oil strives to recoup recent losses

Oil prices rose in European trade on Monday after sustaining heavy losses on Friday, as US crude tries to recover from two-month lows, while Brent attempts to climb off seven-week lows as investors bet against a full-fledged US-China trade war. 

As of 09:40 GMT, US crude rose to $64.75 a barrel from the opening of $64.38, with a session-high at $64.90, and the lowest since April 10 at $63.58. 

Brent rose to $74.05 a barrel from the opening of $73.05, with an intraday high at $74.24, and the lowest since May 2 at $72.44. 

US crude lost 4.0% on Friday, the first loss in three days and the largest since May 25, while Brent shed 3.7%, the largest drop since September 1, 2015, amid mounting US-China trade tensions. 

Oil fell 1.9% last week, the fourth weekly decliner in a row as production increases in the three biggest global producers, Russia, the US, and Saudi Arabia. 

US-China Trade Dispute  

The US decided on Friday to impose tariffs of $50 billion worth of Chinese imports, with China retaliating with 25% taxes on 659 US products. 

Morgan Stanley said negative risks rose in the market due to trade tensions, but expected negotiations and deescalation to win the day at the end instead of a full war.  

Market Supplies  

Goldman Sachs said the oil market is still suffering from a deficit, which would require increased output from OPEC and Russia by the end of the year. 

Goldman expects OPEC and Russian production to increase by 1.3 million bpd by the end of 2018, and by 0.5 million in the first half of 2019.

Baker Hughes reported an increase of a single rig in the US oil rig count last week, the fourth in a row, to a total of 863 rigs, the highest since March 2015. 

US production is now up 29% from mid-2016 levels to a total of 10.90 million bpd, passing Saudi Arabia's 10 million bpd, and nearing Russia's 11.1 million bpd.