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Oil Futures Recover After Weak Start, Settle Notably Higher

Crude oil prices edged higher on Monday amid speculation production cuts by OPEC and lower shipments from Saudi Arabia will outweigh concerns about near term energy demand outlook.

It was not a positive start, however, for oil futures this morning, as prices dropped on concerns that a prolonged U.S.-China trade war could weigh on global growth and result in weak energy demand.

A downward revision in U.S. growth forecast by Goldman Sachs contributed as well to oil's weak start.

West Texas Intermediate crude oil futures for September ended up $0.43, or about 0.8%, at $54.93 a barrel.

On Friday, West Texas Intermediate Crude oil futures for September ended up $1.96, or about 3.7%, at $54.50 a barrel.

Kuwait's oil minister Khaled al-Fadhei brushed off fears of a global economic downturn, saying these were "exaggerated." He said global crude demand should pick up in the second half of the year and help reducer oil inventories.

OPEC members have been cutting production to drain global oil stocks and Saudi Arabia is cutting more than the agreed quota.

On Friday, the International Energy Agency (IEA) said that the signs of an economic slowdown had caused oil demand to grow at its slowest pace since the financial crisis of 2008.

Global oil demand growth has been very sluggish in the first half of 2019 and the situation is becoming even more uncertain amid mounting signs of an economic slowdown and a ratcheting up of the trade row, the IEA said on Friday.

The Paris-based agency cut its 2019 and 2020 global oil demand growth forecast to 1.1 million and 1.3 million barrels per day (bpd), respectively.

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