Crude Pauses After Punching Above $54Crude prices have leveled off on Friday. Crude took advantage of dollar weakness on Thursday, climbing 2.0 percent.
EIA Inventory Surplus Surges
Oil prices have been under downward pressure due to continuing surpluses of crude inventories. The Energy Information Administration (EIA) posted a huge surplus of 9.3 million barrels on Wednesday. This was up sharply from the previous release of 2.9 million. This marked the highest surplus since May. Another factor weighing on crude prices is the slowdown in China. Chinese GDP dipped to 6.0% in the third quarter, down from 6.2% in Q2. The ongoing trade war between the U.S. and China has hampered the Chinese economy, as the manufacturing sector has contracted and exports are down. The current round of trade talks will be especially important for China, which badly needs an agreement with the U.S., even it is a limited deal. The U.S. has agreed to remove tariffs that were set to take effect this week, but a new 15% tariff is set to commence on December 15, unless the sides can hammer out an agreement prior to that date.