Trump-Obsessed Traders Continue Oil Losses, Staunovo "Surprised" By Behaviour

Meanwhile, demand appears robust throughout Asia: File Image/Pixabay

With his influence stronger than ever in media and analytical circles, U.S. president Donald Trump reiterating his vow on Thursday to increase oil production rekindled supply versus demand concerns, ensuring that two key commodities would incur further losses.

As of 1911 GMT, Brent dipped 36 cents to $74.25 per barrel, while West Texas Intermediate declined 44 cents at $70.59.

Despite's Trump's reiteration, Giovanni Staunovo, analyst at UBS, said, "There is no indication of accelerating U.S. drilling activity," and he added that he was surprised by the market reaction.

Staunovo went on to remark that "The only certainty is that comments from president Trump will continue to drive volatility in the oil market."

Oil trading was also said to be influenced by the aftermath of reports that U.S. stockpiles had risen by 8.7 million barrels last week, well above expectations of a 2 million barrel increase; expectations from Macquarie are that this week will see another large build.

Meanwhile, European crude prices suffered multi-month lows as refineries go offline for regular maintenance, and Bloomberg observed that market weakness for real barrels "is also showing up in key gauges of the derivatives market that reflect the health of crude trading: the nearest Brent futures contract is registering its smallest premium to the next month in five weeks, a sign of a softer outlook."

Rania Gule, senior market analyst at XS.com, felt compelled to mention the one key factor lending support to oil on Thursday, namely an increase in Saudi Arabia's crude prices for Asian buyers, which implied demand strength in the region.

Gule said, "It seems that the oil market is experiencing high volatility, with crude-oil prices fluctuating between selling pressures driven by rising U.S. inventories and trade tensions, and the support provided by Saudi Aramco's decision to raise prices for Asian buyers.

"These mixed reactions create an environment of uncertainty, as investors attempt to balance the impact of various factors on price direction."