Oil slid to the lowest in almost a month as pessimism about a trade truce between the U.S. and China continued to dog markets, while the resumption of Russian pipeline flows fed worries about a supply glut.

Futures tumbled as much as 3.4 per cent on Thursday in New York, erasing earlier gains. Tech and consumer stocks fell amid a spate of disappointing corporate earnings, while U.S. Treasuries weakened on signs that Beijing and Washington are making little progress in reaching a deal.

Russian pipeline operator Transneft PJSC, meanwhile, said it resumed full flows from the country’s largest crude producer, Rosneft PJSC, after imposing restrictions due to contamination concerns.

“The market is waking up to the fact that global oil demand is wilting and the possible prompt that could improve the situation is still remote,” said Judith Dwarkin, chief economist at Calgary-based consultant RS Energy. “There’s been no improvement in he U.S.-China trade dispute even though they say they are coming back to the table.”

Oil has fallen all week as the specter of a renewed U.S.-China conflict dented the demand outlook, while American fuel stockpiles jumped. That’s overshadowed worries that Iran may shut down the Strait of Hormuz, a key chokepoint for much of the world’s oil shipments.

West Texas Intermediate for August delivery fell US$1.61 to US$55.17 at 1:21 p.m. on the New York Mercantile Exchange, after earlier touching the lowest since June 20. September Brent lost US$1.77 to US$61.89 on the ICE Futures Europe Exchange. The global benchmark crude traded at a premium of US$6.58 to WTI for the same month.

In an interview with Bloomberg Wednesday, Iran’s Foreign Minister Javad Zarif said the U.S. “shot itself in the foot” by pulling out of its nuclear accord with his nation. Crude briefly rallied on Thursday after Iran confirmed the seizure of an oil tanker in the Persian Gulf this week.

Iran’s state-run Press TV news channel later aired footage of a tanker that disappeared from global satellite tracking systems four days ago. The ship was smuggling fuel out of the country, the Iranian Revolutionary Guard Corps said.

Other oil-market news:

  • Gasoline futures slipped 2.4 per cent to US$1.8341 a gallon.
  • Bankers who once scrambled for a piece of Saudi Aramco’s IPO are now asking whether it’s worth their time and effort.
  • Commodities trading giant Vitol Group has appointed Ben Marshall to the board of directors, a move suggesting that he may be in line for the top job in the Americas.