Oil under pressure as trade tiff depresses sentiment

Trump is prepared to ramp up a dispute with China and has told aides he is ready to impose tariffs on $200bn more Chinese imports as early as next week, Bloomberg reported on Thursday.

However, oil markets are tightening with a recent surplus draining, trade figures show.

The volume of unsold crude stored in the Atlantic basin has dwindled from about 30 cargoes to just a handful in recent weeks, a Reuters analysis showed.

Brent is on track for a rise of more than 4% in August with US light crude gaining 2%.

“The contracts are in a strong up-trend,” said Robin Bieber, who watches price charts for brokerage PVM Oil Associates.

Investors are worried that, with Venezuelan supply falling sharply, Iranian crude supply will be cut sharply ahead of the imposition on US sanctions on Tehran in November.

“The November deadline to comply with the US demands for an Iran oil embargo is moving closer and, in anticipation, buyers seemingly have begun reducing their purchases,” said Norbert Ruecker, commodity analyst at Swiss bank Julius Baer.

“Venezuela remains equally concerning,” he said.

Many analysts say the uptrend in crude prices will continue.

“Brent prices will exceed $80 a barrel before the end of the year,” US bank Jefferies forecast on Friday.

Reuters