Oil prices steadied in trading on Friday as the US dollar slipped and Saudi Arabia reported it will be exporting less crude in August, outweighing concerns about trade tensions between the Trump administration and China. Equinor photo by Øyvind Hagen.
Oil prices set for third straight weekly decline
Oil prices were steady on Friday despite threats from US President Donald Trump to put tariffs on all $500 billion of goods the United States imports from China.
By 1:53 p.m., EDT, Brent crude rose 42 cents to $73/barrel and US West Texas Intermediate was up 2 cents to $68.26/barrel. The Canadian Crude Index slipped 11 cents to $41.06.
Despite the modest gains on Friday, oil prices are set to drop for a third straight week, mostly due to concerns over growing crude supplies.
In an interview with CNBC, Trump said he is prepared to put tariffs on all $500 billion of goods imported from China.
“The impact on world economic growth of a levy of this magnitude will be severe and will likely have a strong negative impact on markets,” Olaf van den Heuvel, chief investment officer at Aegon Asset Management told Reuters.
And after Trump criticized the Federal Reserve, the US dollar slipped, relieving some pressure on oil prices, according to Phil Flynn, analyst at Price Futures Group in Chicago.
“The dollar was a one-way ticket for the last couple of weeks and basically reversed directions, giving us some strong support,” Flynn told Reuters.
As well, OPEC kingpin Saudi Arabia says it will cut back its exports in August by about 100,000 barrels per day (b/d) to ensure that the global crude market remains balanced.
Last week, the kingdom along with Russia agreed to boost crude production. This along with a surprise increase in US crude stocks undermined oil prices, according to Tariq Zahir, analyst at Tyche Capital.
“You’re having supply come back on to the markets, so it’s not surprising to see a little bit of weakness,” Zahir told Reuters.
On Friday, Baker Hughes’ weekly rig count reported that there were five fewer oil rigs in the US last week, bringing the number of oil rigs down to 858. In Canada, there were three more oil rigs in operation, bringing the oil rig count up to 142.
According to Reuters, US energy companies cut the number of operational rigs by the most since March, likely because of a drop in oil prices.