Oil claws report some losses after the "Black Friday" dive


SINGAPORE (Reuters) – Oil prices have recovered some losses after a dip of about 8% in the previous session, but remain under pressure with Brent crude below $ 60 a barrel, due to fundamentals weak and financial markets in difficulty.

PHOTO PHOTO: Oil comes from a spout of the original well of 1859 by Edwin Drake who launched the modern oil industry at the Drake Well Museum and Park in Titusville, Pennsylvania, United States, October 5, 2017. REUTERS / Brendan McDermid / File Photo

Brent crude futures in the first month LCOc1 rose 91 cents, or 1.6 percent, to $ 59.71 a barrel by 0520 GMT.

U.S. crude futures West Texas Intermediate (WTI) CLc1 increased by 49 cents, or 1 percent, to $ 50.91 a barrel.

Earnings have done little to offset the selloff on Friday, which traders have already dubbed "Black Friday".

Reacting to Friday's crashes in Brent and WTI, China's crude futures in Shanghai on Monday ISCcv1 fell 5%, hitting their negative daily limit.

Downward pressure comes from an increase in supply and a slowdown in demand growth that should lead to an excess of oil supply within the next year.

"2019 will be a difficult year for the oil market, as the questions regarding the prospect of a slowdown in the global economy and a supply surplus should increase," Fitch Solutions analysts said today.

Fitch said that even a planned supply cut led by the Organization of Petroleum Exporting Countries (OPEC) following an official meeting on 6 December "may not be enough to counter downward forces".

(GRAPHIC: global offer of crude oil and balance of demand – tmsnrt.rs/2PKtzIy)


Oil markets are also suffering from a decline in the broader financial markets.

"2018 clearly marked the end of the 10 year Asian credit bull market due to the worsening financial conditions in Asia (especially China), and we expect it to remain the case in 2019," Morgan Stanley said in a note on Sunday.

"We do not think we are still at the bottom of the cycle," said the United States bank.

The oil markets have also been weighed down by a strong US dollar .DYY, which this year rose against most other currencies, thanks to the increase in interest rates that have attracted investors' money to others. currencies and also on activities such as oil, which are seen as more risky than the greenback.

"Anything called against the USD is under pressure right now," McKenna said.

Another risk for global trade and overall economic growth is the trade war between the two largest economies in the world, the United States and China.

"The trade conflict between China and the United States poses a downside risk when we expect the United States to impose 25% tariffs on all Chinese imports by the first quarter of 2019," Morgan said in a statement published Friday.

Reporting by Henning Gloystein; editing by Joseph Radford and Richard Pullin

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