Oil steadies near $70 as buoyant Chinese imports offset worry about trade

London — Brent crude held steady near $70 a barrel on Wednesday as record Chinese imports and tighter global supplies eased concerns about a deepening trade spat between the US and China.

US sanctions on crude exporters Iran and Venezuela as well as supply cuts by oil cartel Opec and Russia also supported prices.

Brent crude futures were at $69.78 per barrel by 9.02am GMT, down 10c or 0.14%.

US crude futures were at $61.47 per barrel, up 7c or 0.1%.

“It has been a less than auspicious start to the month for the energy complex. Oil prices had rallied about 40% since the beginning of the year but the move higher has for now been put on the back burner,” said Stephen Brennock, analyst at London-based oil brokerage PVM.

China’s crude imports in April hit a record for the month of 10.64-million barrels per day (bpd), customs data showed on Wednesday. That is an 11% rise from April 2018. The country is the world’s largest oil importer.

Oil prices had fallen earlier this week due to announcements from Washington that the US would further raise tariffs on Chinese goods on Friday.

“The focus now will be on the two days of talks in Washington scheduled to take place between US and Chinese officials,” said Jasper Lawler, head of research at futures brokerage London Capital Group.

Before that, prices had rallied on a tightening of US sanctions on Iran with the aim of reducing oil exports from the key producer to zero.

Iran has said it will defy the sanctions. It also said it would stop implementing “some commitments” under a 2015 nuclear deal if it was not allowed to export oil.

Source: businesslive.co.za