Oil prices have declined due to growing fears of a potential fall in fuel demand, as the G20 leaders made it clear that global economic growth risks have increased.
The major contributors to the increasing risks are being showcased as rising trade and geopolitical tensions.
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Benchmark Brent crude slipped nine cents, or 0.1% to stand at $72.98 per barrel, while US West Texas Intermediate (WTI) futures went down 13 cents, or 0.2%, to $68.13, Reuters reported.
At a meeting in Buenos Aires, finance ministers and central bank governors representing the world’s 20 biggest economies called for constructive talks to ensure global growth is shielded from trade and geopolitical tensions.
In a statement, the finance leaders were quoted as saying: “Global economic growth remains robust and unemployment is at a decade low.
“However, growth has been less synchronised recently, and downside risks over the short and medium term have increased.”
The talks took place in the backdrop of an intensifying trade war between the US and China.
So far, the countries have imposed import duties on $34bn worth of goods.
On 20 July, US President Donald Trump warned Beijing to make structural changes to its technology transfer, industrial subsidy and joint venture policies or risk the imposition of tariffs on all $500bn of goods exported by China to the US.
AxiTrader chief market strategist Greg McKenna said: “The impact of the trade war and the recognition that President Trump and his administration are serious about going to the mat on this issue is finally starting to register in the consciousness of traders and investors in oil and other financial markets.”
Regarding the potential fall in fuel demand, US energy services firm Baker Hughes noted that US drillers cut the number of oil rigs by five in the week ending 20 July, bringing the total count to 858.
However, the rig count is higher than a year ago when 764 rigs were operational.
