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  • An oil rig drilling a well at sunrise near Midland, Texas.

    An oil rig drilling a well at sunrise near Midland, Texas. | Photo: Reuters

Published 8 August 2019

Brent crude ended the session up US$1.15, or 2.1 percent, at US$57.38 a barrel, after hitting a session high of US$58.01.

Oil jumped more than two percent on Thursday on expectations that falling prices could lead to production cuts, coupled with a steadying of the yuan currency after a week of turmoil spurred by an escalation in U.S.-China trade tensions.

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Prices rebounded after tumbling nearly five percent to their lowest since January on Wednesday after data showed an unexpected build in U.S. crude stockpiles after nearly two months of decline.

China's yuan strengthened against the dollar and its exports unexpectedly returned to growth in July on improved global demand despite U.S. trade pressure. The dollar fell 0.2 percent against the offshore yuan.

Reports that Saudi Arabia, the world's biggest oil exporter, had called other producers to discuss the slide in crude prices have helped support the market, traders and analysts said.

Persistent worries about demand growth have weighed on global oil markets, particularly as the world's two biggest economies are locked in a trade row.

Last Thursday, oil prices plummeted more than seven percent, with the U.S. benchmark posting its worst day in more than four years after President Donald Trump said he would impose additional tariffs Chinese imports starting Sept. 1.

Crude oil shipments into China, the world's largest importer, in July rose 14 percent from a year earlier as new refineries ramped up purchases. Fuel exports continued to climb as supply outstripped demand in the world's second-largest oil consumer.

Saudi Arabia plans to keep its crude oil exports below seven million barrels per day in August and September despite strong demand from customers, to help drain global oil inventories and bring the market back to balance, a Saudi oil official said.

Geopolitical tensions over the safety of oil tankers passing through the Persian Gulf remained unresolved as Iran seized a second oil tanker near the strategic waterway that it accused of smuggling fuel last month.

The U.S. Maritime Administration said U.S.-flagged commercial vessels should send their transit plans for the Strait of Hormuz and Gulf waters to U.S. and British naval authorities, and that crews should not forcibly resist any Iranian boarding party.

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