The oil and gas sector is full of booms and downs. Prices majorly rise during global economic strength and as demand or supply gap. Meanwhile, supply and demand are driven by several factors. It includes Changes in the US dollar, Organization of the Petroleum Exporting Countries (OPEC), production and inventory supplies, global economy, and Deals and treaties. In 2015, crude oil prices fell to less than half in less than a year. Many oil and gas executives believed it would be years before oil returned to US$ 100 per barrel. As per recent news, Oil prices/rates recovered as compared to past session. Brent crude was up 0.21%, at US$ 58.38/barrel. While US West Texas Intermediate futures expanded by 0.37%, at US$ 54.14/barrel.
Earlier in this week, the markets were underpinned by optimism over potential production cuts by OPEC. Later, the US reported that retail sales increased by 0.7% in July as buyers bought a range of goods even as they cut back on vehicle purchases. According to Mr. Stephen Innes, who is AxiTrader market strategist said that the participants in the market are becoming worried regarding recession risk. Recently, US President Mr. Donald Trump warned to be “tougher” on Beijing in a forecast period if trade talks dragged on. Compounding marketplace fears that ongoing trade disputes amongst the US and China could cause an economic downturn.
China is the world’s second-largest oil consumer and the largest importer. A private survey also revealed that activity in China’s services sector grew at the most accelerated pace as new orders rose. In addition, given that tariffs/charges pose a major threat to US economic growth, which in turn poses a threat to the global economy of health. The oil prices will still be under pressure, especially if tariff and trade wars show no sign of dwindling. A preliminary survey released by Reuters on Tuesday showed that US crude oil inventories might fall for the third consecutive week. Venezuela’s oil exports fell to lowest level in August 2019 on the supply side, according to Refinitiv Eikon data and internal reports. This showed stringent sanctions in the US.