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.