Investing.com – Oil prices edged higher on Friday as comments that Saudi Arabia’s exports would fall in August renewed expectations for a global shortage in crude supplies.
Crude Oil WTI Futures for September delivery gained 0.2% to $68.28 per barrel at 1:22AM ET (1:22 GMT), while Brent Oil Futures for September delivery also climbed 0.17% to $72.70 for one barrel.
Saudi Arabia's OPEC Governor Adeeb Al-Aama said in a statement that the kingdom expects crude exports to fall by about 100,000 barrels per day in August as it limits excess production.
Oil prices were also boosted on forecasts that inventories at the U.S. oil delivery hub in Cushing, Oklahoma fell 1.8 million barrels, through Tuesday, traders said, citing energy information provider Genscape.
Despite today’s gains, oil prices were set to drop for the week amid trade conflict between the U.S. and China, the world’s two biggest oil users.
"Risk sentiment is wobbling, which I believe is attributed to PBOC pushing the yuan complex lower via the fix," said Stephen Innes, head of trading APAC at OANDA brokerage
"Markets are now nervous, not only about a trade war, but also a currency war."
The Chinese yuan slumped further on Friday after the China’s central bank weakened its daily reference rate by the most since June 2016.
The USD/CNY pair traded sharply lower and tumbled to a one-year low after The People’s Bank of China (PBOC) weakened the fixing by 0.9% to 6.7671 per dollar on Friday.
Investors are concerned with the PBOC’s seeming comfort with the yuan’s slide. On July 3, Chinese central bankers pledged to keep their currency stable and to not use it as a weapon in the trade conflict with the U.S. That effort helped the yuan reverse some of its plunge earlier this month.
Traders remained concerned that lower oil demand in the U.S. and China caused by an economic slowdown from their trade war would have significant impacts on the market.
The U.S. accounted for 20.2% of global oil demand in 2017 while China consumed 13% of the world's oil last year.