Published: Mon, July 09, 2018
Money | By Armando Alvarado

Oil dips in nervous markets with U.S., China on brink…

Oil dips in nervous markets with U.S., China on brink…

Reuters in a report quoted familiar sources as saying that South Korea would not lift any Iranian crude and condensate in July for the first time over the past six years.

US crude was bullish after official data on Thursday showed inventories at Cushing, the delivery point for USA crude futures, fell to their lowest in 3-1/2 years.

The Organization of the Petroleum Exporting Countries and other countries agreed earlier this month to a modest increase in output to dampen a rally in oil prices, which recently hit a 3-1/2 year high.

In other news, Iran's oil minister accused Trump over the weekend of insulting OPEC by ordering it to boost production and lower down prices.

The United States and China have started a trade war on Friday, introducing bilateral tariffs worth 34 billion Dollars, while not showing willingness to start talks with a view to reaching a ceasefire.

Brent crude futures were down 7 cents, or 0.1 per cent, at $77.32.

China has indicated that it could place a tariff of 25% on US oil.

USA crude inventories rose by 1.2 million barrels in the week ending June 29, the Energy Information Administration said on Thursday, much higher than analysts' expectations for a decrease of 3.5 million barrels.

"Things will get worse before they get better on trade... between the USA and China", said Greg McKenna, chief market strategist at futures brokerage AxiTrader.

American oil producers may find a new friend in India as they brace for a trade war with China that could curb USA shipments.

Ferrari says British Grand Prix was 'good for Formula 1'
There was a definite buzz in the air that Lewis Hamilton would take a record fifth win in succession and a record sixth overall. He was soon up to 16th and by lap nine he was eighth, but some distance from Vettel, who led Bottas by six seconds on lap 12.

Meanwhile, Brent oil price was under pressure on Friday amid an escalating global trade tensions.

USA crude oil is not on the list of 545 products the Chinese government has said it would immediately retaliate with in response to American duties.

USA tariffs on $34 billion in Chinese imports took effect as a deadline passed on Friday.

Energy consultancy FGE on Friday issued a warning of looming supply shortages due to USA sanctions against Iran, and because of disruptions elsewhere.

"Iran's exports are some 2.7 million bpd, including condensate", it noted.

Two other sources said South Korea cancelled July loadings of crude and condensate cargoes from Iran as it was uncertain whether the country would receive an exemption from USA sanctions on Iran trade.

"At the same time, Venezuela... will lose another 400,000 bpd by year-end with production going to below 1 million bpd", FGE said, adding that another 300,000 bpd of Libyan capacity was disrupted.

Oil prices were mixed on Friday, with short-covering pushing up US crude futures while Brent slipped on global trade tensions and increased Saudi production.

Saudi Arabia told the Organization of the Petroleum Exporting Countries that it increased production by nearly 500,000 barrels per day last month.

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