Published: Wed, September 19, 2018
Business | By Tara Barton

Oil prices fall as US-China trade war clouds demand outlook

"Saudi Arabia and the UAE are turning OPEC into a tool for the U.S. and consequently the organization has not much credit left", Iran's OPEC governor Hossein Kazempour Ardebili told the Shana newswire, affiliated to Iran's Oil Ministry. Brent crude futures had dropped 29 cents, or 0.37 percent, to $77.76 per barrel by 12.02pm.

U.S. West Texas Intermediate (WTI) futures fell 20 cents or 0.3 percent, to $68.79 a barrel.

Technical analysis from Reuters market analyst Wang Tao showed that US oil prices have repeatedly failed to overcome a resistance level of $69.85 per barrel, signalling a dissipation of positive outlook.

Official U.S. government data is due to be released on Wednesday.

Ministers from OPEC and non-OPEC producers meet on Sunday to discuss compliance with output policies.

The news agency reported that while the kingdom had no desire to push prices higher than $80 a barrel, it may no longer be possible to avoid it because of tightening supplies amid USA sanctions against Iran.

Bloomberg reported that while Saudi Arabia had no desire to push prices higher than $80, it may no longer be possible to avoid it. USA sanctions affecting Iran's petroleum sector are due to come into force from November 4.

Bloomberg reported on Tuesday, citing unnamed Saudi sources, the kingdom was now comfortable with prices above $80 per barrel, at least for the short-term.

U.S. Energy Secretary Rick Perry said last week in Moscow that he did not foresee any price spikes once sanctions came into effect, and was positive about Saudi output.

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Yesterday, Russian Energy Minister Alexander Novak said all possible scenarios for oil output could be discussed at a meeting of OPEC and non-OPEC states in Algeria this month.

Oil futures also drew support from geopolitical risk on Tuesday.

Russian Federation has told Israel it will take all necessary measures to protect its military personnel in Syria, the Foreign Ministry in Moscow said.

Oil markets fell on Tuesday as the latest escalation in the Sino-US trade war clouded the outlook for crude demand from the two countries, which are the world's top two oil consumers.

Russian Federation has said that Moscow is prepared to work with the USA to balance the oil market after the two countries had a meeting last week to discuss boosting oil output.

US President Donald Trump has repeatedly urged the cartel to raise its production and said that other countries must stop buying oil from Iran or face US sanctions.

The tariffs Mr Trump has imposed are thought to limit economic activity in China and the United States as less fuel is consumed to move goods for trade.

Beijing was the world's leading importer of oil in 2017 and imported around 8.4 million barrels of crude per day.

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