Oil prices slipped as the market continue to remain tensed over the US-China trade war and its potential damage on crude demand.
International benchmark Brent crude futures LCOc1 dropped 19 cents to $58.75 per barrel, while US West Texas Intermediate (WTI) crude futures CLc1 were down 12 cents to trade at $53.51 per barrel, reported Reuters.
In the last week, Brent prices dropped more than 9% after the US President Donald Trump announced a 10% tariff on another $300bn of Chinese imports. The fresh tariffs will be effective from 1 September 2019. China responded by depreciating the value of the currency beyond the 7-per-dollar level in a bid to make exports cheaper.
Fitch Solutions was quoted by Reuters as saying in a note: “The most significant outcome of the ramp-up in tariff measures will be through increased economic and trade uncertainties, negatively impacting physical oil and gas demand and market sentiment.”
On the other hand, Saudi Arabia Energy Minister Khalid Al-Falih and US Energy Secretary Rick Perry met in Washington and expressed concern over threats on maritime traffic in the Arabian Gulf.
Recently, tensions in the Middle East have increased following attacks on tankers and US drones raising concerns of possible disruptions in oil supplies. However, reports indicating larger-than-expected drop in US crude stocks provided some support to the crude prices.
In the week to 2 August 2019, crude stocks dropped by 3.4 million barrels to 439.6 million barrels.