WTI drops below $55, loses more than 8% for the week
- Baker Hughes rig count rises to 800.
- Heightened geopolitical tensions continue to weigh on commodities.
- WTI drops nearly 15% in last two weeks.
Crude oil prices remained under pressure on Friday and the barrel of West Texas Intermediate, which lost more than 4% on Thursday, touched its lowest level since mid-February at $53.98. As of writing, WTI was down 4.15% on a daily basis at $54.05.
Concerns over the potential negative impact of a prolonged trade conflict between the U.S. and China on the global economy and the oil demand outlook continue to weigh on commodities. Earlier in the day, the data published in China showed that the manufacturing sector expanded at a slower pace than expected in May and the business activity in the service sector contracted in the same period.
Furthermore, reports of China's Commerce Ministry preparing a list of "unreliable entities" list to combat foreign firms that cut supplies to China hinted at further escalation of the trade war down the road. Additionally, President Trump vowed to impose tariffs on all Mexican imports to trigger a fresh wave of flight-to-safety on Friday.
Meanwhile, the weekly report published by the Baker Hughes Energy Services revealed that the number of active oil rigs in the U.S. rose to 800 from 797 last week to point to higher production in the U.S.
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
