Oil prices fell at the start of Monday’s trading session amid rising fuel demand concerns, especially after the G20 finance ministers and central bank governors warned of increased risks to global economic growth as geopolitical and trade tensions escalate.
Brent crude fell 9 cents or 0.1 percent to trade at $72.98 a barrel. US crude oil futures fell 13 cents, or 0.2 percent, to $68.13 per barrel.
Finance ministers and central bankers of the world’s top 20 economies concluded their meeting in Buenos Aires on Sunday evening and called for more dialogue to prevent growth from being negatively affected by various trade and geopolitics related tensions.
Economic growth is closely linked to growth in demand for oil, as economic growth supports fuel consumption for trade, travel and the automotive industry. Last week, US energy companies cut the number of oil drilling platforms at their highest rate since March, as growth slowed over the past month amidst the recent oil price declines.
In a closely watched report last Friday, Baker Hughes Energy Services said drilling companies cut the number of drilling platforms by five in a week to July 20. Followed by a total of 858 drilling platforms.
In a separate context within the oil markets, Schlumberger International confirmed that small oil companies in the maritime sector are experiencing a state of progress and sustained economic recovery. The company noted that over the past three years, this sector has been at a state of lack of investment caused by the decline in crude oil prices. According to them, this situation is heading in the opposite direction in the coming years, in order to meet the increasing global demand for crude oil.
A recent report by Schlumberger indicated that exploration and production projects are growing, recovering from a previous recession, although exploration spending is still below industry expectations and keeping pace with market variables, particularly demand growth.
According to the company’s report, it is clear that the current level of exploration investments over the next three or four years is still volatile, pointing out that the market started recording some growth in the second quarter, especially in terms of the number of exploration platforms, which rose by 22% and 7% on an annual basis respectively.
The Schlumberger report predicted exploratory drilling and drilling for this year to be a level of about 12% higher than in 2017, although no immediate and rapid financial flows were granted and expected to accelerate the growth of drilling activities in 2019.