Oil prices rose to multi-week lows on Tuesday, the first full day of trading after the new US and Chinese tariffs and counter-rates came into effect and with the appearance of signs that it is OPEC that its key partner in the production cut-off agreement, Russia, increased oil production in August.
Tuesday at 11:06 EDT on Tuesday, WTI Crude had dropped 3.23% to $ 53.23 and Brent Crude had dropped below $ 58 a barrel, to $ 57.59, down 1.82 % in the day.
Market participants were once again worried about the repercussions of the US-China trade war on global economies and the growth in oil demand. On Sunday, September 1, the United States imposed tariffs on Chinese goods and China imposed tariffs on some US goods, although Beijing left most rates for the December round of new tariffs.
On the demand side, the market is worried about the slowdown in economies and, by extension, due to the slowdown in the growth of oil demand. Also on the supply side bearish factors abound.
According to a Reuters poll, OPEC crude oil production increased in August, thanks to Iraq and Nigeria. OPEC production in August was estimated at 29.61 million barrels per day, or 80,000 barrels per day compared to the July production level. Although Saudi Arabia is still exceeding its cut share excessively, it increased production in August to produce 9.63 million barrels a day.
In Russia, the key partner of the OPEC in the OPEC + coalition to curb production in support of oil prices, oil production increased to 11.29 million barrels of oil in August, against 11.15 million barrels of July and overcoming the limit of Russia in the ambit of the agreement. Rosneft increased its oil production by 5% last month compared to the previous month, according to data from the Russian energy ministry quoted by Reuters.
However, Russian Energy Minister Alexander Novak stated that Russia was still trying to fully respect its share of the cuts.
By Tsvetana Paraskova for OilScore
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