Oil dips in nervous trading as US-China trade war looms

Oil dips in nervous trading as US-China trade war looms

US West Texas Intermediate and worldwide bench-mark Brent crude oil futures are trading mixed in limited action.

US crude was bullish after official data on Thursday showed inventories at Cushing, the delivery point for USA crude futures, fell to their lowest in 3-1/2 years.

American crude shipments to China are around 400,000 barrels per day (bpd), worth $1 billion a month at current prices.

The discount has halved to $5.54 a barrel on Friday from $11.57 in early June. That could lure India to buy more United States crude, Fielden was quoted as saying. "I do expect that at least over the next few weeks, the Brent-WTI spread is going to narrow".

As part of a wave of retaliation for Friday's US tariffs, China has threatened a 25 percent duty on imports of USA crude.

Although Saudi Arabia and Russian Federation have said they would raise output to make up for disruptions, FGE said "there simply is not enough capacity to make up for Iran's crude losses, plus Venezuela and Libya", and warned of the possibility of oil prices rising to $100 per barrel.

FGE said the US government may grant some waivers to allies that are particularly reliant on Iranian supplies, and that some Iranian oil would also be smuggled into markets. The supply increase reversed some of the cuts that OPEC and other major producers put in place in early 2017 to end several years of supply glut.

Investors are also focusing on how much exports from Saudi Arabia and other Gulf states will rise, Chauhan said.

American oil producers may find a new friend in India as they brace for a trade war with China that could curb USA shipments.

World oil prices are growing, despite the growth of drilling activity in the USA, on expectations of irregularities in the schedule of supplies of this raw material from Libya and Canada.

Oil slipped toward $77 a barrel on Friday, under pressure from higher Saudi production and trade tensions between the United States and China, although oil supply disruptions lent support.

If that happens, "Chinese demand would then shift to other suppliers".

Oil benchmarks went in different directions again on Friday afternoon, with WTI trading up and Brent trading down as fears of the escalating U.S.

One option could be more shipments to India, which already has been buying more US crude. The overall rig count increased by five rigs, according to the report, with all of that increase coming from oil rigs, the number of gas rigs stayed the same. In the week ending July 6, five new platforms have been put in operations, reaching a total 863 platforms, which is 100 more than past year.

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