Oil prices have declined following concerns that the ongoing trade war between the US and China will affect global economic growth and due to signs of rising supply worldwide.
Front-month Brent crude oil futures reduced by 19 cents, or 0.3%, to reach $77.15 a barrel, while US West Texas Intermediate (WTI) crude futures went down five cents to trade at $66.99, Reuters reported.
Oil prices have been decreasing due to a weakness in global stock markets this month, with the Sino-US trade dispute weighing on stocks.
The news agency reported that Washington is planning to impose tariffs worth an additional $257bn on Chinese goods if upcoming talks between Presidents Donald Trump and Xi Jinping fail to find a truce.
However, prices received some support after reports emerged that Trump expects to strike ‘a great deal’ with China on trade.
Consultancy JBC Energy told Reuters that the oil price weakness was ‘probably driven by the wider negative market sentiment amid speculation about additional US tariffs on Chinese imports, should upcoming talks fail to produce the desired results’.
BHP Billiton chief commercial officer Arnoud Balhuizen noted that the company has reduced its expectations of global growth for next year and 2020, citing a ‘lose-lose’ result from the trade conflict between the world’s two largest economies.
Meanwhile, International Energy Agency (IEA) executive director Fatih Birol stated that high oil prices are taking a toll on consumers and could pull down fuel demand.
Birol was quoted as saying: “There are two downward pressures on global oil demand growth. One is high oil prices, and in many countries, they’re directly related to consumer prices. The second one is global economic growth momentum slowing down.”
Rising supply from major oil producers is another factor that affected prices.
Saudi Arabia and Russia indicated that they will enhance supplies to compensate for losses resulting from US sanctions on Iran next week.
Data available with Refinitiv Eikon showed that crude production from key oil producers such as Russia, the US and Saudi Arabia, reached 33 million barrels per day (bpd) for the first time in September.