The Trade Fight Between the U.S. and China Is Weighing on Oil Prices
Crude explorers deployed fewer rigs in U.S. fields this week amid an escalating U.S.-China trade war that weighed on oil prices.
Working American oil rigs fell by two this week to 805, according to data released Friday by oilfield-services provider Baker Hughes. It was the third drop in four weeks. Drillers in the world’s biggest oil field, the Permian Basin, idled two rigs to bring the regional tally to 457 while activity in the Eagle Ford shale in South Texas remained steady.
Pressed by investors to show more austerity and return profits to shareholders, explorers spent the first five months of this year idling almost 10 percent of the onshore U.S. rig fleet. The outlook for oil demand has soured amid a protracted trade dispute between the U.S. and China, the world’s largest economies.
“For now, with this global risk-off sentiment, that leaves oil under pressure no matter what, unless we start to see signs of actual shortages,” said Rob Haworth, who helps oversee $151 billion at U.S. Bank Wealth Management in Seattle.
U.S. crude production fell by 100,000 barrels a day last week to 12.2 million, according to the Energy Information Administration.