Oil prices dipped on Monday as rising trade tensions and economic woes in emerging markets dented the outlook for fuel demand growth, but U.S. sanctions against Iran still pointed towards tighter supply.
Front-month Brent crude oil futures LCOc1 were at $72.57 per barrel at 0702 GMT, down 24 cents, or 0.3 percent, from their last close. U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $67.43 a barrel, down 20 cents, or 0.3 percent from their last settlement. Traders said the demand outlook for oil was dimming due to ongoing trade disputes between the United States and China, as well as economic trouble in Turkey potentially spreading across emerging markets. “Trade protectionism and escalating tensions between the world’s largest economies (the United States and China) have cast a looming shadow on global oil demand growth in 2018,” Singapore-based brokerage Phillip Futures said on Monday.
Hedge funds and other money managers reduced their bullish positions in U.S. crude futures and options in the week ending on Aug. 7, data from the U.S. Commodity Futures Trading Commission showed on Friday.
In broader markets, the concerns about Turkey’s financial stability stoking fears of contagion among other emerging markets, especially in Asia, pulled down stocks.
