Oil prices fall more than 1pc

18 June, 2019 12:00 AM printer

LONDON: Oil prices slipped more than 1per cent on Monday as signs of an economic slowdown amid international trade disputes began to outweigh supply fears stoked by attacks on oil tankers in the Gulf of Oman last week.

Brent futures were down 68 cents, or 1.1per cent, to US$61.33 a barrel at 1140 GMT, having gained 1.1per cent on Friday, report agencies.

U.S. West Texas Intermediate (WTI) crude futures were down 58 cents, or 1.1per cent, at US$51.93, having firmed by 0.4per cent in the previous session.

"China's industrial output growth (is) falling to the lowest level in 17 years amid trade tensions with the U.S. Today, oil markets will have to digest more demand concerns as India implemented retaliatory tariffs on a number of U.S. goods yesterday," consultancy JBC Energy said in a note.

Also sapping prices was the dim outlook for oil demand growth in 2019 projected by the International Energy Agency (IEA) on Friday, citing worsening prospects for global trade.

Market expectations of a price rise had been shrinking in the period leading up to the tanker attacks.

"Seven consecutive weeks of selling has now reduced the combined long in Brent and WTI crude oil by 41per cent to 421,000 lots, a near-four-month low," said Saxo Bank commodity strategist Ole Hansen

"This is before the tanker attacks in the Gulf of Oman briefly boosted prices before being capped again by demand fears and another counter-seasonal rise in U.S. crude oil stocks."

Though danger of an immediate confrontation over last week's tanker attacks - which the United States blamed on Iran but Tehran denied - appeared to recede, tensions over the strategic route remain high. A fifth of the world's oil passes through the Strait of Hormuz.

U.S. Secretary of State Mike Pompeo on Sunday said that Washington does not want to go to war with Iran but will take every action necessary, including diplomacy, to guarantee safe navigation in the Middle East.