(Bloomberg) -- Oil traded near $68 a barrel as investors assessed the impact of escalating trade frictions between the world’s two biggest economies against a decreasing number of working oil rigs in the U.S.
September futures in New York were little changed after falling 2.4 percent last week. The world’s top finance chiefs warned on Sunday that trade tensions threatened global growth as the engines of leading economies fall out of sync. Meanwhile, rigs targeting oil in the U.S. fell by the most since March, according to data from Baker Hughes.
Oil has retreated from the highs of June as investors feared an evolving trade conflict between the U.S. and China will imperil economic growth and cut energy demand. U.S. President Donald Trump continues to put pressure on the Organization of Petroleum Exporting Countries to lower prices by pumping more, while he prepares to slap tariffs on $500 billion of Chinese goods. The market has also been supported by American threats to curb exports from Iran.
What happens with the rising trade conflict between the U.S. and China is “going to be the dominant driver for commodities in shorter term.” Daniel Hynes, a senior strategist at Australia & New Zealand Banking Group Ltd., said by phone. “We’re seeing a little bit of volatility around investor positions and currency moves from the trade tensions.”
West Texas Intermediate crude for September delivery traded at $68.09 a barrel on the New York Mercantile Exchange, down 17 cents, at 10:40 a.m. in Singapore. The August contract, which expired Friday, closed 1.4 percent higher at $70.46 a barrel. Total volume traded was about 54 percent below the 100-day average.
Brent for September settlement lost 23 cents to $72.84 a barrel on the London-based ICE Futures Europe exchange. Prices fell 3 percent last week. The global benchmark crude traded at a $4.76 premium to WTI.
To contact the reporters on this story: Tsuyoshi Inajima in Tokyo at tinajima@bloomberg.net;Sharon Cho in Singapore at ccho28@bloomberg.net
To contact the editors responsible for this story: Pratish Narayanan at pnarayanan9@bloomberg.net, Heesu Lee
©2018 Bloomberg L.P.
Advertisement