Oil steadied after its longest run of weekly declines in three years, as traders weighed threats to economic activity in emerging markets against risks to supplies around the world.
Futures in New York were little changed. Prices fell for a seventh week last week as the currency crisis in Turkey raised fears of contagion, further rattling investors already worried by the ongoing trade dispute between the U.S. and China. At the same time, crude was buoyed by North Sea strikes, stagnant U.S. drilling and continued concern that American sanctions will hurt Iranian sales.
Oil has fallen about 11 percent from the highs of late June as a trade war between the U.S. and China and turmoil in Turkey threaten global economic growth and energy demand. Rising supplies have also weighed on prices, with U.S. output near a record-high and increasing production from the Organization of Petroleum Exporting Countries and its allies.
“The news backdrop on the oil market currently points in no clear direction,” said Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt. While the trade dispute and fears of emerging-market spillover from the Turkish crisis are “dampening the demand outlook,” the “prospect of oil-supply restrictions is likely to preclude any further price slide.”
West Texas Intermediate crude for September delivery traded at $65.94 a barrel on the New York Mercantile Exchange, up 3 cents, at 10:35 a.m. London time. The contract climbed 45 cents to $65.91 on Friday. Total volume traded Monday was about 37 percent below the 100-day average.
Brent for October was at $72.15 a barrel on the London-based ICE Futures Europe exchange, up 32 cents, and traded at a $6.93 premium to WTI for the same month. The global benchmark crude rose 40 cents to $71.83 on Friday.
Rigs searching for oil in the U.S. were unchanged at 869 last week, according to data from Baker Hughes. While working rigs remained at the highest level in more than three years, the count has grown by only 10 since late May, adding to speculation that the shale boom is easing.
Pipeline jams and soaring costs are already taking their toll on U.S. explorers as President Donald Trump’s tariffs on foreign steel add costs to build pipes. Cabot Oil & Gas Corp. has been pushed to stop spending money on exploring the Permian, while ConocoPhillips is considering moving some rigs from the Permian to the less crowded Eagle Ford region of South Texas.
“Growth in U.S. crude production is expected to slow down until new pipelines are built in 2019,” Mikiko Tate, a senior analyst at Sumitomo Corp. Global Research Co., said by phone from Tokyo. U.S.-China trade tensions and the Turkish crisis “remains a concern. While signs of their impact haven’t yet appeared, investors are increasingly becoming cautious.”
Other oil-market news:
Hedge funds have trimmed bets on higher Brent prices to the lowest in more than a year as geopolitical turmoil stokes concern about a global economic downturn. Wild swings in the yuan and punitive storage costs are making oil traders think twice about a bet on China’s fledgling crude futures that looks highly lucrative on paper.