“The U.S. sanctions imposed on the Chinese shipping company COSCO are seriously denting demand for imported crude oil… This has a profound impact on U.S. crude oil inventories as reflected in last nights API report,” said Tamas Varga, an analyst at PVM Oil Associates. “U.S. refinery maintenance is not helping to reverse the current trend and further builds in U.S. crude oil inventories can be expected in the next few weeks.” The United States imposed sanctions on COSCO Shipping Tanker (Dalian) Co and subsidiary COSCO Shipping Tanker (Dalian) Seaman & Ship Management Co for allegedly carrying Iranian crude oil.
Adding to concerns about the global economy – and therefore oil demand – data from the United States showed retail sales in September fell for the first time in seven months. Earlier data showed a moderation in job growth and services sector activity. Still, the new Brexit deal helped limit the fall in oil prices. Prime Minister Boris Johnson said that Britain and the EU had agreed a “great” new Brexit deal and urged lawmakers to approve it at the weekend. European Commission President Jean-Claude Juncker also said Britain and the EU had agreed a deal. However, the Northern Irish party Johnson needs to help ratify any agreement has refused to support the deal.
Hopes of a potential U.S.-China trade deal also supported crude prices. China’s commerce ministry said on Thursday that China hoped to reach a phased agreement with Washington as early as possible, and make progress on canceling tariffs on each others’ goods.
