Oil Holds Steady As Trump Is Accused Of Hurting Investment

U.S. economic news and Russia also factored into tepid oil trading on Thursday: File Image/Pixabay

Concern among analysts about supply tightness increased on Thursday thanks to Russia introducing a partial ban on diesel exports until the end of the year; however, the prices of two key benchmarks remained relatively unchanged from the previous session after an upgrade of the U.S. economy cast doubt about any further interest rate cuts in that country.

Brent settled up 11 cents at $69.42 per barrel, and West Texas Intermediate dropped 1 cent to $64.98.

Alexander Novak, deputy prime minister of Russia, stated on Thursday that in addition to a partial ban on diesel products he would extend an existing ban on gasoline exports; meanwhile, stateside, the U.S. Commerce Department’s Bureau of Economic Analysis revised earlier figures, disclosing that U.S. gross domestic product increased at an upwardly revised 3.8 percent annualized rate last quarter.

Further dismaying oil traders was the Kurdistan Regional Government announcing on Thursday that oil exports would resume within 48 hours after the tripartite agreement among Iraq’s oil ministry.

Priyanka Sachdeva, senior market analyst at Phillip Nova, said, "The return of Kurdish supplies adds back fears of an oversupply narrative, propelling a pullback in prices that hover near a seven-week high."

In other oil news on Thursday, media reported that a quarterly survey of oil and gas companies by the Federal Reserve Bank of Dallas revealed that nearly 80 percent of executives have delayed investment decisions in response to heightened uncertainty about the future price of oil and the cost of producing crude.

Many of the executive said U.S. president Donald Trump’s push for lower crude prices, higher tariffs, and the resulting uncertainty are hurting investment, and one executive warned that “drilling is going to disappear” as Trump pushes for $40 crude while  steel tariffs are raising costs.

Another executive complained that, “Guided by a U.S. Department of Energy that tells [the Trump administration] what they want to hear instead of hard facts, they operate with little understanding of shale economics.”

Also on Thursday, offshore driller Transocean suffered a huge drop in shares after disclosing it was planning to sell 125 million shares at a price of $3.05, significantly lower than Wednesday’s close of $3.64 (and 25 million shares more than it originally planned).

Transocean expects to book about $381 million from the sale, the proceeds of which will go towards paying off debt.