While oil has given up most of its gains since the attack on Saudi Arabia as the kingdom restores lost output quicker-than-expected, crude is still set for a monthly advance
Oil was steady after the biggest weekly loss since July as investors weighed rising tension in the Middle East against the prospect for an escalating trade dispute between the US and China.
Futures were little changed in New York after falling 3.8% last week. Yemen’s Houthi rebels, which claimed responsibility for attacks on Saudi Arabia’s energy facilities two weeks ago, said they had captured soldiers from the kingdom during an operation near the border of the countries. Beijing said it would continue to open up its financial markets amid reports that the US is considering restrictions on fund flows to China.
While oil has given up most of its gains since the attack on Saudi Arabia as the kingdom restores lost output quicker-than-expected, crude is still set for a monthly advance. The world’s two largest economies are heading into another round of high-level trade talks following China’s week-long national holidays starting Oct. 1. Their prolonged dispute has already almost halved oil consumption growth, Citigroup Inc. said earlier this month.
“Tensions in the Middle East are on the rise and the market needs to start pricing this premium in at some point,” said Howie Lee, a Singapore-based economist at Oversea-Chinese Banking Corp. “It seems incredulous how prices have almost completely retracted the spike” after the attacks, he said.
West Texas Intermediate for November delivery lost 12 cents to $55.79 a barrel on the New York Mercantile Exchange as of 7:45 a.m. London time after gaining as much as 66 cents earlier. The contract fell 50 cents to $55.91 on Friday. Prices are up 1.2% this month.
Brent for November settlement, which expires Monday, fell 26 cents to $61.65 a barrel on the ICE Futures Europe Exchange. Prices are up 2% this month. The more-active December contract was down 15 cents to $60.89. The global benchmark crude traded at a $5.85 premium to WTI.
Thousands were captured on Saturday including “many Saudi commanders, officers and soldiers,” the Houthi rebels said in a statement carried by the Saba news agency. The action came a day after the kingdom agreed to a limited cease-fire with the Iranian-backed rebel group.
The US has issued a partial denial after a Bloomberg report indicated that it’s discussing imposing limits on American investments in Chinese companies and financial markets. China said it will encourage foreign financial institutions and funds to invest in the domestic financial market to boost competitiveness of its financial system, according to a summary from the eighth meeting of the Financial Stability and Development Committee posted on its website Sunday.
Other oil-market news: