Oil dips as US/China trade dispute expected to stall economic growth

Oil dips as US/China trade dispute expected to stall economic growth

The WTI lost 0.47 us dollar to settle at 68.49 dollars a barrel on the New York Mercantile Exchange, while Brent erased 0.24 dollar to close at 73.21 dollars a barrel on the London ICE Futures Exchange.

"There is room for [prices in] the crude market to soften a bit more", says John Woods of JJ Woods Associates, adding that inventories could rise further as refineries head toward maintenance season after the summer driving season.

After plummeting more than 3 percent on Wednesday, oil prices steadied early on Thursday, but still traded close to their seven-week low as the U.S.

The IEA kept its 2018 oil demand growth forecast unchanged at 1.4 million bpd but raised its 2019 forecast by around 110,000 bpd to 1.49 million bpd.

At 1500 GMT, October ICE Brent was trading $1.81 lower at $72.84/b, while September NYMEX crude was down $1.87 at $67.30/b. China's government said it will place tariffs on USA goods including cars, crude oil and scrap metal starting on the same date. We will monitor this week's figures for another increase in inventory levels which could see oil prices move lower.

Additionally, an executive from China's Dongming Petrochemical Group said at the time that he expected Beijing to soon impose the tariff on US oil imports.

Singapore-based brokerage Phillip Futures said an escalating trade dispute between the U.S. and China has "unnerved investors on the prospect of lowered global oil demand growth".

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The market was moderated by lingering trade tensions between the United States and China, the world's leading economies.

Indian Oil has bought 6 million barrels of U.S. crude for delivery in November to January, a company official said, as the nation's top refiner scouts for alternatives to Iranian oil ahead of impending United States sanctions.

Oil prices fell on Wednesday, following Chinese import data that highlighted an ongoing slowdown in demand from previously avid buyers, although evidence of falling US crude inventories and the introduction of Iranian sanctions helped stem losses.

"As oil sanctions against Iran take effect, perhaps in combination with production problems elsewhere, maintaining global supply might be very challenging and would come at the expense of maintaining an adequate spare capacity cushion", the IEA said.

Oil prices rose Tuesday with the global benchmark crude, Brent soaring above $74 per barrel as the United States revived sanctions against Iran, a major producer, tightening supply to the worldwide market.

Iran is the third-largest producer among the members of the Organization of the Petroleum Exporting Countries (Opec). "We are going to work with individual countries on a case-by-case basis, but our goal is to reduce the amount of revenue and hard currency going into Iran", said a senior U.S. administration official on Monday.

The list of US goods released by China on Wednesday includes diesel, fuel oils and other petroleum products. Its previous estimate was at 10.79 million barrels per day.

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