Oil prices steadied on Tuesday as rising tension between the United States and Iran highlighted risks to supply while escalating trade disputes raised the prospect of slower economic growth and perhaps weaker energy demand.
Brent crude oil was unchanged at $73.06 a barrel by 0840 GMT. U.S. light crude was up 15 cents at $68.04.
Both oil benchmarks have fallen this month as crude supplies from Russia, Saudi Arabia and other members of the Organization of the Petroleum Exporting Countries have increased and unscheduled production losses have eased, reports Reuters.
Market sentiment has been driven by geopolitical worries: fears that supply could be disrupted by confrontation in the Middle East or that Washington’s trade dispute with its major trading partners could dampen global growth.
Iran, OPEC’s third-largest producer pumping 3.75 million barrels a day, has come under increasing U.S. pressure, with the administration of President Donald Trump pushing countries to cut all imports of Iranian oil from November.
Saudi Arabia and other large producers are ramping up output to offset losses that are likely to come as the November deadline approaches.
“While oil prices were the primary beneficiary of the weekend’s headline battle between President Trump and Iranian President (Hassan) Rouhani, that boost started to fizzle as traders then veered to oversupply concerns,” said Stephen Innes at brokerage OANDA.
G20 finance leaders voiced concern over the weekend about the risk to global growth from trade tensions between the United States and China, among others.
“It is surely only a matter of time before something tangible yields from the ongoing trade war stories and it probably won’t be a pretty outcome,” said Matt Stanley, a fuel oil broker at Freight Investors Services in Dubai.
“I imagine crude will stay in a fairly narrow range over the next few days,” Stanley said.
Meanwhile, U.S. crude inventories at the U.S. crude futures delivery hub at Cushing, Oklahoma rose in the four days to Friday, according to data supplier Genscape, traders said.
On a weekly basis, stockpiles at the hub were expected to fall for the 10th consecutive week, traders said.
A Reuters survey on Monday estimated on average that total U.S. crude oil stocks fell about 3.2 million barrels last week, after unexpectedly rising in the week to July 13.
U.S. industry body the American Petroleum Institute is scheduled to release its inventories data for last week at 4:30 p.m. EDT (2030 GMT) on Tuesday.