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Oil prices recorded marginal gains on Friday on continuing tensions in the Middle East, offset by a sluggish global economic growth outlook amid the US-China trade war.

Brent crude futures LCOc1 increased by 7 cents at $63.46 a barrel, a gain of 0.1%, compared to 0.3% in the previous session.

US West Texas Intermediate crude CLc1 was 18 cents higher at $56.20 a barrel, an increase of 0.3% compared to 0.25% overnight, Reuters reported.

Singapore-based brokerage Phillip Futures commodities analyst Benjamin Lu said: “Growing challenges in the macroeconomic environment have kept bullish bets in check as risk appetites remain soft over potential weakness in global fuel demand.”

The US-China trade war continues to worry economists, as this is likely to deepen a global economic growth rut, despite expectations that major central banks will cut rates or ease policy further.

The report said that increasing pessimism is evident from the latest Reuters polls of over 500 economists conducted from 1-24 July, which revealed a downgraded or unchanged growth outlook for 90% of more than 45 economies polled. This outlook also applied for 2020.

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By GlobalData

While concerns over supply disruptions in the Middle East have contributed to the recent increase in prices, oil has been under pressure due to worries about global economic growth amid signs of escalating Sino-US trade war over 2019.

Vanguard Markets managing partner Stephen Innes said in a note: “Bullish wagers will be held hostage to the soggy global growth outlook.”

Meanwhile, Britain sent a warship to accompany British-flagged vessels through the Strait of Hormuz, a week after Iran seized a British-flagged tanker in the Gulf. The government had previously said that it did not have the resources to do so.

Amid the tensions between Tehran and Washington, US Secretary of State Mike Pompeo said in a television interview on Thursday that he was willing to travel to Iran for talks, if necessary.