Oil prices have edged down as economic slowdown worries amid international trade tensions outweigh supply fears fueled by attacks on two oil tankers in the Gulf of Oman last week.
Brent futures declined 25 cents to $61.76 a barrel, while US West Texas Intermediate (WTI) crude futures slipped 22 cents at $52.29, Reuters reported.
Reuters quoted JBC Energy saying in a note: “China’s industrial output growth (is) falling to the lowest level in 17 years amid trade tensions with the US. Today, oil markets will have to digest more demand concerns as India implemented retaliatory tariffs on a number of US goods yesterday.”
Oil prices are further weakened due to the dim outlook projected by the International Energy Agency (IEA) for oil demand growth this year. Demand growth estimates by IEA were revised downwards by 100,000 barrels to 1.2 million barrels per day (mbpd).
The IEA said that due to stimulus packages and growth in developing countries, the growth is expected to improve in 2020.
Oil prices may gain some support from comments made by Saudi energy minister Khalid al-Falih that the Organization of the Petroleum Exporting Countries (OPEC) would probably meet in the first week of July, and is expected to reach an agreement on extending production cuts. The agreement is set to come to an end in June, and the meeting in the coming weeks will decide the next step.
From 1 January 2019 the OPEC plus Russia and other producers have agreed to cut production by 1.2 mbpd.