Oil Slips As Trade War Tensions Fuel Demand Growth Concerns
Despite data showing a decline in crude stockpiles in the U.S., oil prices eased on Thursday as traders weighed the possibility of a drop in demand for crude due to U.S.-China trade tensions and the current economic turmoil in some emerging markets.
Data from the Energy Information Administration showed that crude supplies in the U.S. declined by 4.3 million barrels for the week ended August 31. That was a much larger than expected drop. The report also revealed that gasoline stockpiles increased by 1.8 million barrels in the week, while distillate stockpiles were up by 3.1 million barrels.
According to the report released by the American Petroleum Institute on Wednesday, oil stockpiles decreased by 1.2 million barrels last week.
Markets also expect crude supplies to drop significantly after the beginning of U.S. sanctions on Iranian oil from early November.
Meanwhile, a survey report from S&P Global Platts said OPEC saw output rise to 32.89 million barrels a day in August, a 10-month high.
Crude oil futures for October delivery ended down $0.95, or 1.4%, at $67.77 a barrel, the lowest settlement in more than two weeks.
On Wednesday, crude oil futures ended down $1.15, or 1.7%, at $68.72 a barrel.
Reports suggest the U.S. will implement new tariffs on imports worth $200 billion from China, effective this week.
Meanwhile, China has reportedly warned that it will be forced to retaliate if the United States implements any new tariff measures after the end of a public comment period.
According to some media reports, the United States and Canada have made progress in talks to revise the North American Free Trade Agreement. Officials of the two countries resumed trade talks on Wednesday, after the discussions last week ended without any progress.