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Oil markets tense on Middle East crisis, U.S.-China trade spat

Reuters  |  SINGAPORE 

By Gloystein

SINGAPORE (Reuters) - Oil markets remained tense on Thursday on concerns over a military escalation in Syria, although prices were some way off Wednesday's late-2014 highs as bulging U.S. supplies weighed.

A trade dispute between the and also kept markets on edge.

Brent crude futures were at $72.33 per barrel at 0648 GMT, up 27 cents, or 0.4 percent from their last close.

U.S. WTI crude futures were at $67.20 a barrel, up 38 cents, or 0.4 percent from their last settlement.

In China, crude futures rose by 10.5 yuan to 428.7 yuan ($68.28) per barrel, up 2.5 percent, with record volumes traded.

Both Brent and WTI on Wednesday hit their highest since late 2014 of $73.09 and $67.45 per barrel, respectively, after said it intercepted missiles over and U.S. warned of imminent military action in

"Geopolitical risks outweighed an unexpected rise in inventories in the U.S.," said.

Ongoing concerns of a prolonged trade dispute between the and are also keeping markets on edge.

lashed out at the on Thursday saying that the trade disputes, in which both sides have threatened to impose tariffs on imports of several products, were "single-handedly provoked by the U.S." and that was prepared to escalate the spat if did not back off from its threatened import tariffs.

The also said there had been no bilateral negotiations with the on the trade frictions.

AMPLE SUPPLIES

Although markets were tense, supplies remain ample especially due to the United States, and analysts said this would likely weigh on prices at some point.

"Geopolitical events could keep prices elevated above $70 Brent in April and May, but our balances suggest a high likelihood of a downward correction in 2H18," said.

Barclays said it expected Brent to average $63 per barrel in 2018 and $60 in 2019. For WTI, the forecast prices of $58 and $55 a barrel for this year and next.

U.S. rose by 3.3 million barrels to 428.64 million barrels.

Meanwhile, U.S. crude production last week hit a fresh record of 10.53 million barrels per day (bpd), up by a quarter since mid-2016.

The now produces more crude than top exporter Only Russia, at currently just under 11 million bpd, pumps out more.

"Barring any geopolitical shocks, we see limited upside potential for from current levels due to ongoing oversupply, mainly from the U.S. and Russia, and also a slowing demand growth outlook," said Georgi Slavov, at

($1 = 6.2785 Chinese yuan renminbi)

(Reporting by Gloystein; Additional reporting by Roslan Khasawneh; Editing by and Biju Dwarakanath)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Thu, April 12 2018. 12:28 IST
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