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Oil slips as trade war worries outweigh Iran sanctions

Reuters  |  NEW YORK 

By Ayenat Mersie

NEW YORK (Reuters) - prices slipped on Friday, pressured by renewed concerns that a global trade war could dent energy demand, although impending U.S. sanctions on and falling Venezuelan output limited the decline.

Benchmark Brent fell 42 cents to $77.35 a barrel by 1:35 p.m. EDT (1735 GMT). U.S. crude slipped 36 cents to $69.89.

For the month, global benchmark Brent was set to jump 4.3 percent and U.S. crude 1.6 percent. has been buoyed by tumbling Venezuelan output and declining shipments from ahead of the imposition of U.S. sanctions on in November.

On Friday, however, oil "appears to be following equities lower amidst renewed U.S./Chinese tariff concerns that could easily escalate in slowing global economic growth and, hence, world oil demand," Jim Ritterbusch, of Ritterbusch and Associates, said in a note.

The index fell for a second day as a report that U.S. was preparing to step up a trade war with dampened risk appetite and erased some gains from a rally this week. In the previous session, concerns about Argentina's currency weakening had weighed on the outlook for emerging markets.

Trump threatened on Thursday to withdraw from the and impose tariffs on $200 billion of Chinese imports.

The U.S. rig count, an indicator of future production, rose for the first time in 3 weeks, firm reported.

U.S. crude production in June hit 10.674 million barrels per day, the highest monthly total on record, the (EIA) said in a monthly report on Friday.

Crude exports rose nearly 200,000 bpd in the month, hitting a new record of 2.2 million bpd, more than twice the level seen last June, the EIA said in a separate monthly report on Friday.

U.S. crude's discount to Brent, which has widened by nearly a third in the past month, has encouraged an increase in U.S. exports, Bob Yawger, director of at Mizuho.

Production from the Organization of the Petroleum Exporting Countries increased by 220,000 bpd in August, according to a survey.

polled by cut their price forecasts for 2018 in August, for the first time in almost a year, on growing concerns about global trade. A survey of 45 economists and analysts forecast Brent would average $72.71 in 2018, 16 cents below the $72.87 projected in July but above the $71.96 average so far this year.

The 2019 price was forecast to average $72.58.

(Additional reporting by in London and Henning Gloystein in Singapore; editing by and Phil Berlowitz)

(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: Fri, August 31 2018. 23:48 IST