Oil Falls on Global Growth Jitters
By Sarah McFarlane
-- Oil prices fell on Monday, in tandem with global equities, amid doubts over any near-term solution to the trade dispute between the U.S. and China, and fears that border-security negotiations in Washington could fail to prevent another government shutdown.
-- Brent crude, the global oil benchmark, was trading down 1.9% at $60.49 a barrel on London's Intercontinental Exchange, its highest level in more than three weeks.
-- West Texas Intermediate futures, the U.S. oil standard, were down 2% at $52.63 a barrel on the New York Mercantile Exchange.
Global markets: Stocks in Europe and Asia fell on Monday as the shaky global economic outlook continued to plague markets. Last week the International Monetary Fund lowered its estimates for global growth in 2019 to 3.5% from a previous forecast of 3.7%, and warned that there was a risk of a sharper decline in growth, in part because of trade disputes.
"There is the fear that the world is heading into a recession but that's not visible on the oil side," said Giovanni Staunovo, commodities analyst at UBS Wealth Management. The bank expects global oil demand to grow by 1.3 million barrels a day in 2019, compared with 1.5 million barrels last year. In addition, the U.S. economy has also been challenged by the longest government shutdown in its history, which ended on Friday when President Trump signed a stopgap spending bill which covers three weeks.
Rig count: The U.S. rig count, an indicator of activity in the sector, rose for the first time this year, up 10 in the past week to 862, according to oil-field services company Baker Hughes, a GE Company. "Because prices have risen considerably since the start of the year and there is a high number of drilled but uncompleted wells, drilling activity is likely to recover soon," said Commerzbank in a daily note, adding this could cap oil prices.
Venezuela: Investors are monitoring the situation in the major oil producer after unrest over the country's political leadership. Earlier this month President Maduro was sworn in for a second term. The threat of U.S. sanctions on Venezuelan oil exports remains.
-- The American Petroleum Institute reports its weekly data on U.S. inventories at 4.30 p.m. ET Tuesday.
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(END) Dow Jones Newswires
January 28, 2019 06:24 ET (11:24 GMT)Copyright (c) 2019 Dow Jones & Company, Inc.