World

Oil Declines as Trade Tensions Continue to Stoke Demand Fears

By Bloomberg 12 August 2019
Caption
The crude oil tanker Front Altair on fire in the Gulf of Oman, 13 June 2019. According to the Norwegian Maritime Authority, the Front Altair is currently on fire in the Gulf of Oman after allegedly being attacked and in the early morning of 13 June between the UAE and Iran. EPA-EFE/STRINGER

Oil dropped after U.S. President Donald Trump said planned trade talks with China next month could be called off, stoking concerns the deepening dispute will damage global growth

Futures lost as much as 0.7% in New York, snapping a two-day gain. Trump’s threat to cancel negotiations came after the International Monetary Fund on Friday warned of downside risks to the Chinese economy if trade tensions escalate. Oil rallied late last week after Saudi Arabia said it would constrain exports in September after signalling it would seek to halt the price slump.
WTI, Brent struggle to maintain gains on growth concerns

Crude has dropped more than 7% so far this month as fears the U.S.-China spat may expand into a currency war eclipsed concerns of supply disruptions in the Middle East. The International Energy Agency on Friday trimmed its forecasts for oil demand growth this year and next and warned that it may lower the estimates further as the trade conflict drags on.

“Oil continues to be sensitive to trade war rhetoric,’’ Alfonso Esparza, a senior market analyst at Oanda Corp., said in a note. “Saudi Arabia is willing to do more to prevent a free fall, but hard to imagine what that would look like. The prolonged trade war has been a negative factor for global growth estimates.’’

West Texas Intermediate crude for September delivery fell 30 cents to $54.20 a barrel on the New York Mercantile Exchange as of 9:29 a.m. Singapore time. The contract advanced 3.7% to settle at $54.50 on Friday, trimming a second weekly loss.

Brent for October settlement retreated 31 cents, or 0.5%, to $58.22 on the ICE Futures Europe Exchange. The contract added $1.15 to close at $58.53 on Friday, trimming the weekly loss to 5.4%. The global benchmark crude traded at a $4.17 premium to WTI for the same month.

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