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July 8, 2019

Oil prices start the week steady

Oil prices have steadied as worldwide economic growth concerns and consequent oil demand increase, despite tensions caused by Iran’s nuclear programme.

Oil prices have steadied as worldwide economic growth concerns and consequent oil demand increase, despite tensions caused by Iran’s nuclear programme.

Brent crude futures were down one cent at $64.22 a barrel, while US West Texas Intermediate (WTI) was down two cents at $57.49.

Iran threatened to recommence deactivated centrifuges and accelerate its enrichment of uranium to 20%, which further threatened the 2015 nuclear agreement that Washington abandoned in 2018.

The sanctions imposed by Washington prevent Iran from receiving benefits, which were intended to encourage the country to curb its nuclear programme under the 2015 agreement with world powers.

As a result, the US and Iran are close to conflict, with US President Donald Trump calling off air strikes last month minutes before impact.

However, oil prices are experiencing continuous pressure due to persistent concerns over demand.

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SEB chief commodities analyst Bjarne Schieldrop said: “The market reacts so little to the tense situation in the Middle East is a reflection of a very well-supplied market in general and a very relaxed market.”

The trade war between the US and China has also dampened prospects for global economic growth and oil demand. Oil prices were affected by strong US economic data. The country’s employment growth is reported to have rebounded strongly in June, with government payrolls increasing, indicating that the sharp slowdown in hiring in May was a one-off.

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