Oil near $69 as trade conflict counters latest supply risks

Oil firm

While it's likely that Saudi Arabia is keen to limit Iran's influence in the Middle East, it appears the kingdom could also be in for a double-whammy benefit of increasing its exports to fill the gap left by Iran and selling at higher prices, assuming the market tightens on the loss of Iranian barrels.

The August total is also likely to be just above the 9.65 million barrels imported over the first seven months, showing the scale of acceleration in India's imports of USA crude.

After snapping tariffs on steel and aluminium imports from a number of allies, the United States has been engaged in an escalating duel with China with levies being announced on a growing range of goods. Lee said the actual imposition of additional tariffs by the USA on Chinese products could be delayed and concerns about higher consumer prices in the US may discourage President Donald Trump's administration from imposing further tariffs.

"Of course, such decisions being taken by the US side are absolutely unfriendly and can hardly be associated with the. constructive atmosphere achieved at the latest meeting of the two presidents", he was quoted by Russian news agency Tass as saying. Benchmark U.S. crude oil lost 26 cents to $66.68 a barrel in electronic trading on the New York Mercantile Exchange.

Brent and West Intermediate Texas crudes traded generally sideways last week, despite the pronounced weakness at the end of the week. Tuesday's sanctions primarily hit Iran's ability to function in global financial markets. "The reports that Saudi Arabia's production actually dropped in July continue to provide support for the market".

Oil prices slumped Wednesday after Beijing announced it would retaliate against the Trump administration with a 25% tariff on another $16 billion worth of U.S. products, including crude exports to China. A second tranche coming into effect on November 5 will cover Iran's oil sector.

The list of USA goods released by China on Wednesday includes diesel, fuel oils and other petroleum products.

From November, Washington will also target Iran's petroleum sector.

Prior to this deal, International Olympic Committee had struck deals for importing 10 million barrels from six cargoes in the spot market.

French bank Societe Generale said there was now a "comfortable supply" in physical crude markets, but noted "Iran sanctions will take another 1 million bpd off the markets".

Oil prices fell from more than $100 a barrel in 2014 to less than $30 a barrel in early 2016 amid a supply glut, but have recovered to trade above $70 a barrel since April, as output curbs by the Opec cartel of producers and other countries helped to reduce supplies. China, however, removed crude oil from the list of products up for tariffs beginning on August 23. Gasoline inventories increased by 3.1 million barrels and distillate stockpiles rose by about 1.8 million barrels.

Beijing's decision to exclude United States crude reflected China's reliance on imports.

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