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UPDATE 7-Oil rises more than 2% on firm yuan, expectations of more OPEC cuts

Published 09/08/2019, 04:50 am
© Reuters.  UPDATE 7-Oil rises more than 2% on firm yuan, expectations of more OPEC cuts
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* Yuan firms as Beijing signals intent to stabilise decline

* Chinese exports and imports beat forecasts in July

* U.S. crude stockpiles unexpectedly rise last week (Adds Cushing inventory data, updates to settlement)

By Devika Krishna Kumar

NEW YORK, Aug 8 (Reuters) - 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.

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. EIA/S 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. 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."

Reports that Saudi Arabia, the world's biggest oil exporter, had called other producers to discuss the slide in crude prices have helped supported the market, traders and analysts said.

"Saudis are scrambling to send a signal that will stabilize oil markets ... With energy prices heading for the worst weekly close since December, we should not be surprised to hear more rumors that OPEC may be considering increased production cut efforts ahead of a key summit that is tentatively planned for the second week in Abu Dhabi," said Edward Moya, senior market analyst at OANDA in New York.

Persistent worries about demand growth have weighed on global oil markets, particularly as the world's two biggest economies are locked in a trade row.

Crude oil shipments into China, the world's largest importer, in July rose 14% from a year earlier as new refineries ramped up purchases. Fuel exports continued to climb as supply outstripped demand in the world's second-largest oil consumer. Arabia plans to keep its crude oil exports below 7 million barrels per day in August and September despite strong demand from customers, to help drain global oil inventories and bring the market back to balance, a Saudi oil official said. tensions over the safety of oil tankers passing through the Persian Gulf remained unresolved as Iran refused to release a British-flagged tanker it seized last month.

The U.S. Maritime Administration said U.S.-flagged commercial vessels should send their transit plans for the Strait of Hormuz and Gulf waters to U.S. and British naval authorities, and that crews should not forcibly resist any Iranian boarding party. China commodity import data png

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