Oil prices increased on reports suggesting drop in the US crude inventories, though economic slowdown worries restricted the gains.
Brent crude jumped $0.33 to $60.36 a barrel, while the US crude climbed $0.17 to $56.30 per barrel, reported Reuters.
US crude inventories slipped by 3.5 million barrels according to the American Petroleum Institute (API) data. Earlier, analysts polled by Reuters estimated a drop of 1.9 million barrels.
Oil prices also received support from growing tensions in the Middle-East after the US Secretary of State Mike Pompeo said that it would take necessary steps to prevent an Iranian tanker from delivering oil to Syria, violating US-imposed sanctions. Data showing lower crude exports from Saudi Arabia in June 2019 also supported the market.
Earlier, Saudi Arabia, the largest oil exporter in the world, revealed plans to restrict crude exports below seven million barrels per day (bpd) in August and September to revive oil prices. However, concerns of economic slowdown and continuing trade frictions between the US and China dragged the market.
VM Markets managing partner Stephen Innes was quoted by Reuters as saying: “The trade-related tug of war in the oil market will probably extend until we get some semblance of clarity from the next round of US-China trade discussion.”
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The market is also awaiting Federal Reserve chief Jerome Powell’s speech in the central bank’s annual Jackson Hole seminar scheduled this week.
OANDA senior market analyst Edward Moya told Reuters: “The biggest risk to crude prices is if Powell disappoints at Jackson Hole and doesn’t signal more easing will be coming.”