Oil closes high amid mixed economic news and conflicts of signatures on customs duties

Oil prices increased at the settlement today, Thursday, amid investor evaluation of the impact of factors that include the dollar’s decline, a possible increase in the production of the OPEC+ group, the mixed economic news, and the conflict of signals on American customs duties, as well as news about the Russian -Ukrainian war.

Brent crude futures rose 43 cents or 0.7 % to $ 66.55 a barrel upon settlement. West Texas Intermediate crude increased 52 cents, or 0.8 %, to record $ 62.79 a barrel upon settlement.

The number of Americans who submitted new requests to obtain unemployment subsidy increased last week, indicating that the labor market is still solid despite the dark shadows that hang on the economy due to customs duties on imported goods.

The companies resorted to raising prices and lowering their financial expectations due to the high costs caused by the trade war launched by US President Donald Trump and negatively affected global supply chains.

Federal Reserve officials (the US Central Bank) indicated in television interviews that they do not see an urgent need to change monetary policy, as they seek more information to determine the extent of the impact of customs duties on the economy.

“The markets are still trying to accommodate data, as employment statistics show the strength of the labor market, while the Federal Reserve brands positive expectations with comments indicating that unemployment rates may be affected by customs duties,” analysts at Gilber and P. Power Consulting said in a note.

The dollar index fell significantly today, Thursday, with pessimism returning to investors due to the lack of any real progress towards ending the trade war between the United States and China.

The decline in the US currency will reduce the cost of price commodities in dollars, such as oil, for buyers who hold other currencies.

Iranian Foreign Minister Abbas Araqji said today, Thursday, that he is ready to travel to Europe to hold talks on the Tehran nuclear program, and France also indicated that European powers are also ready for dialogue if Iran showed seriousness.

Any successful talks with Europe and the United States are likely to lift sanctions on Iranian oil exports. Iran is the third largest oil producer in the Organization of Petroleum Exporting Countries (OPEC) after Saudi Arabia and Iraq.
Trump criticized Russian President Vladimir Putin on Thursday after Russia bombed the Ukrainian capital, Kiev, with missiles and aircraft march last night. “Vladimir, stop!”

Trump said on Wednesday that the President of Ukraine hinders peace talks to end the war in his country, a peace that may allow more Russian oil to flow to global markets. Russia is one of the largest oil producing countries in the world alongside the United States and Saudi Arabia.

However, many European countries are trying to gradually stop importing Russian oil due to the war. The President of the European Commission, Ursula von der Line, said Thursday that the UNHCR will present during the next two weeks a road map to see it about the gradual disposal of all Russian fuel imports by 2027.

And Russia is a member of the OPEC+group. Reuters said on Wednesday that a number of OPEC members+ suggested that the group accelerate oil production increases for the second month in a row in June.

“They will pump oil barrels into a global economy that is already suffering from American customs duties and the trade war between the two largest global economies, the United States and China,” Bob Yoseger, Director of Future Energy Contracts in Mezzoho, said in a memorandum.