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June 14, 2019updated 17 Jun 2019 11:44am

Oil prices decline on fears that trade dispute will dent demand

Oil prices have declined on fears that trade wars will dent global oil demand, although they gained support following the attacks on two oil tankers in the Gulf of Oman this week.

Oil prices have declined on fears that trade wars will dent global oil demand, although they gained support following the attacks on two oil tankers in the Gulf of Oman this week.

Brent crude futures edged down 14 cents at $61.17 a barrel, while US West Texas Intermediate crude futures declined 28 cents at $52 a barrel, Reuters reported.

Due to worsening prospects for world trade, the International Energy Agency reduced its demand growth forecast by 100,000 barrels per day (bpd) to 1.2 million bpd (mbpd) for 2019.

But the agency added that for 2020, demand growth would increase to 1.4 mbpd.

RBC bank told Reuters: “Yesterday’s attacks on the Japanese and Norwegian tankers in the Gulf of Oman underscore the severity of the security risks stemming from the Iran crisis and the difficulty of achieving a diplomatic off-ramp as long as the crippling US sanctions remain in place.”

Following the attacks, oil prices edged up by as much as 4.5%.

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After US President Donald Trump withdrew from a 2015 multinational nuclear agreement with Iran and reimposed sanctions, tensions have escalated in the Middle East.

US Secretary of State Mike Pompeo said the country has assessed Iran was behind the attacks on both the tankers.

Later, a video was released by the US military which showed Iran’s Revolutionary Guard removing an unexploded mine from the side of an oil tanker owned by Japan.

For 2019, the Organization of the Petroleum Exporting Countries (OPEC) cut its forecast for growth in global oil demand to 1.14 mbpd.

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