Oil prices fell on Monday on fading concerns of supply shortfalls and conflicts in the Middle East after the September 14 attack on Saudi Arabia, but global benchmark Brent posted its biggest quarterly loss this year on demand fears due to the escalating US-China trade war. Brent crude futures settled at $60.78, down $1.13, or 1.8%. US West Texas Intermediate (WTI) crude futures, the US benchmark, fell $1.84, or 3.3%, to $54.07.
Brent gained 0.6% while WTI fell 1.9% in September after volatile month where prices spike nearly 20% after the attacks halved Saudi Arabia's output, but have pared nearly all those gains as output has been quickly restored. For the quarter, however, global benchmark Brent fell 8.7%, the worst quarterly drop since the fourth quarter of 2018, when prices dropped 35%.
WTI also dropped 7.5% in the third quarter, as concerns that the trade war between the United States and China has plunged global economic growth to its lowest levels in a decade weighed on oil demand growth. China's official Purchasing Managers' Index (PMI) was slightly improved this month, increasing from 49.5 in August to 49.8 in September, but remained below the 50-point mark that separates expansion from contraction on a monthly basis, data from the National Bureau of Statistics showed.
China, the world's largest crude importer, warned of instability in international markets from any "decoupling" of China and the United States, after sources said US President Donald Trump's administration was considering delisting Chinese companies from US stock exchanges. "The US and China are still far from any type of agreement. The concern is oil demand is not going to be there," said Kyle Cooper, an oil analyst at IAF Advisors.
Oil prices are likely to remain steady this year, a Reuters survey showed, with supply shocks such as the attack on Saudi Arabia countering flagging demand. Analysts forecast that Brent crude would average $65.19 a barrel in 2019 and WTI $57.96. US oil production fell 276,000 bpd in July to 11.81 million bpd, a third monthly decline since its record at 12.1 million bpd in April, government data showed.
Saudi Aramco last week restored full capacity to the level before the attacks on its oil facilities, Ibrahim Al-Buainain, chief executive officer of its trading arm, said on Monday at a conference in the United Arab Emirates. Aramco's oil output capacity was restored to 11.3 million barrels per day (bpd).