Saudis contact oil firms in response to seven-month low

Oil Reverses Drop After China's Yuan Fix Soothes Investor Nerves

Crude Prices Defy Logic and Rise on Strength of Weakening Demand

"While the oil markets are focused on trade negotiations and demand, the current unprecedented amount of US production is probably the in the market", said Ellen Wald, president of Transversal Consulting and contributor.

Brent crude was up $1.29, closing at $57.53 a barrel, after hitting a session high of $58.01/Bbl.

Brent was on track for a weekly drop of more than 5%, while WTI fell about 2%, after markets this week were weighed down by an unexpected build in U.S. crude stockpiles and on fears of slowing demand amid the deepening China-U.S. trade war.

Oil advanced for the first time this week after Saudi Arabia signaled it's taking steps to stabilize the market, which has been rocked by the escalating U.S. The country's production will be lower in September than in this month, they said.

Esparza added that a weaker US dollar has also lent support to the oil price rebound.

"If we satisfy September demand we will produce about 10.3 million bpd because demand is much higher, but we chose to keep production and exports flat and cut customer requests by 700,000 bpd".

Supply, meanwhile, remains ample despite efforts by some countries, like Saudi Arabia to produce less to support the price of oil.

State-owned Aramco's oil nominations - the requests made by refiners and customers for Saudi crude - were high in September, a sign of healthy oil demand globally, the Saudi official, who asked not to be named, said on Thursday.

U.S. West Texas Intermediate (WTI) crude futures rose $1.45, or 2.8%, to settle at $52.54 a barrel after hitting a peak of $52.98. The Saudis and their partners in the OPEC+ coalition are determined to do what they can for market stability, they said.

Brent has plunged more than 10 percent over the past week after US President Donald Trump said he would slap a 10% tariff on a further $300 billion in Chinese imports from September 1, sending global equity markets into a tailspin. "Worries about the worsening trade war is still keeping the oil market in a stranglehold", noted Commerzbank analyst Carsen Fitsch.

Crude oil futures hit their lowest levels since early 2019 on Wednesday after data from Energy Information Administration showed a significant jump in USA crude stockpiles in the week ended August 2, after seven successive weeks of declines.

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