Oil prices have edged-down due to signs of growing trade tensions between the US and China, which could hold back economic recovery.
Global oil glut may continue due to tensions between these two countries even though Covid-19 lockdown restrictions are being eased across the world, Reuters reported.
US West Texas Intermediate (WTI) crude futures were down $1.46, or 7.6%, to $18.27 a barrel, at 0008 GMT. Last week, the benchmark contract rose by 17%.Meanwhile, Brent crude LCOc1 futures fell $0.90 to $25.54 a barrel at this time, reported the news agency.
Following losses for three consecutive weeks, LCOc1 future rose by 23% during the last week.
US President Donald Trump’s warning on raising taxes on Chinese goods as “certainly an option” to retaliate for the spread of the novel coronavirus out of China, has led to fears of trade tensions, which could hit economic recovery, thereby putting a cap on gains in oil prices.
AxiCorp chief global market strategist Stephen Innes was quoted by the news agency as saying: “The resumption of the trade war will be detrimental to oil prices over the long term.”
The record supply cut production of approximately ten million bpd cuts agreed by the OPEC+ Group has officially started from 01 May.
Meanwhile, US producers Exxon Mobil and Chevron noted that they would each cut output by 400,000 barrels per day (bpd) this quarter (Q2 2020).
Energy services firm Baker Hughes said that the US drillers had cut 53 oil rigs in the week that ended on 01 May, taking the overall rig count down to 325.