Published: Sun, April 08, 2018
Markets | By Josh Butler

Oil prices tumble amid trade worries

Oil prices tumble amid trade worries

"Oil prices are profiting from the general brightening of sentiment on the markets as signs emerge that the trade dispute is easing between the US and China", analysts at Commerzbank said in a note.

At 1005 GMT, ICE June Brent crude futures were at $67.92/b, up a touch from Monday's $67.64/b settle, while the NYMEX May light sweet crude contract was at $63.27/b, against Monday's $63.01/b settle. U.S. oil inventories shrank the most since January, according to government data yesterday, in contrast to a forecast expansion.

Market intelligence firm Genscape said inventories at Cushing, Oklahoma, the delivery point for US crude futures, rose 2.5 million barrels for the week to April 3, according to traders who saw the data.

West Texas Intermediate (WTI) for May delivery fell 4 cents to $63.33 a barrel on the New York Mercantile Exchange as of 10:36 a.m.in London, after dropping 14 cents on Wednesday.

China today confirmed a 25 per cent levy on $50bn (£36bn) worth of US goods, including vehicles and agricultural products like soybeans, in response to US President Donald Trump's planned tariffs on on Chinese goods.

As U.S. production levels sore, the country is exporting more of its own oil and importing less from foreign sources.

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Giovanni Stauvano, a commodity analyst at UBS, told UPI that oil "seems to be caught" between a stronger USA dollar and concerns on the potential trade war.

A day earlier, the American Petroleum Institute surprised traders with a crude oil inventory draw of 3.28 million barrels, versus analyst expectations of a modest build.

The correlation between oil and equities remains strongly positive, meaning a drop on the stock market is likely to be echoed by crude futures. The API, an energy trade group, also reported a 1.1 million barrel rise in gasoline inventories, reports said.

"This morning, it is all about the macro (economic) situation and how the trade relationship between the US and China is evolving", BNP Paribas head of commodities strategy Harry Tchilinguirian told the Reuters Global Oil Forum.

The cuts run until the end of 2018 but Saudi Arabia has said they could be extended in some form into 2019.

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