SEOUL (Reuters) – Oil fell on Wednesday as the intensifying Sino-U.S. trade dispute stoked worries over demand, although a drop in U.S. crude inventories offered some support to prices.
FILE PHOTO: An oil pump is seen at sunset outside Scheibenhard, near Strasbourg, France, October 6, 2017. REUTERS/Christian Hartmann/File Photo
International benchmark Brent crude futures were at $58.70 a barrel by 0039 GMT, down 24 cents, or 0.41%, from their previous settlement and trading near seven-month lows.
West Texas Intermediate (WTI) crude futures fell 20 cents, or 0.37%, from their last close to $53.43 per barrel.
“Crude oil prices remained under pressure as investors grappled with the impact of the trade conflict,” ANZ bank said in a note. Brent prices have plunged more than 9% in the past week after U.S. President Donald Trump said he would slap a 10% tariff on a further $300 billion in Chinese imports starting on Sept. 1, sending global equity markets into a tailspin.
But Trump on Tuesday dismissed fears the trade row with China could be drawn out.
Meanwhile, Saudi Arabia Energy Minister Khalid Al-Falih and U.S. Energy Secretary Rick Perry on Tuesday said both sides expressed concern over threats targeting freedom of maritime traffic in the Arabian Gulf as they met in Washington.
Tensions in the Middle East have heightened in the wake of attacks on tankers and U.S. drones, raising concerns over passing through the Straight of Hormuz, a key shipping artery of global oil trade.
Elsewhere, data indicating a larger-than-expected drop in U.S. crude stocks offered some support to oil prices.
U.S. crude inventories fell by 3.4 million barrels in the week ended Aug.2 to 439.6 million barrels, compared with analyst expectations for a decrease of 2.8 million barrels.
Official data from the government’s Energy Information Administration (EIA) is due later on Wednesday.
Reporting by Jane Chung; Editing by Joseph Radford