Euronews is no longer accessible on Internet Explorer. This browser is not updated by Microsoft and does not support the last technical evolutions. We encourage you to use another browser, such as Edge, Safari, Google Chrome or Mozilla Firefox.
BREAKING NEWS

Oil prices drop as trade tensions stoke economy worries

Oil prices drop as trade tensions stoke economy worries
FILE PHOTO: Pump jacks operate at sunset in an oil field in Midland, Texas U.S. August 22, 2018. REUTERS/Nick Oxford -
Copyright
Nick Oxford(Reuters)
Euronews logo
Text size Aa Aa

TOKYO (Reuters) – Oil fell on Tuesday amid worries over the outlook for demand after the latest signs that international trade disputes have been dragging on the global economy, although tensions in the Middle East offered some support to prices.

Brent crude <LCOc1> futures were down 21 cents, or 0.3%, at $63.90 a barrel by 0022 GMT. They fell 12 cents on Monday.

U.S. West Texas Intermediate crude <CLc1> futures were down 20 cents, or 0.4%, at $57.46 a barrel. They rose 15 cents in the previous session.

Oil prices are being pressured by ongoing worries about demand as the U.S.-China trade war, heading into its second year, dampens prospects for global economic growth.

Japan’s core machinery orders fell by the most in eight months, data showed on Monday, in a sign the global trade tensions are taking a toll on corporate investment.

Japanese government figures on Tuesday also showed that real wages in the country fell for a fifth straight month.

“The prolonged trade war … does not seem to be nearing a resolution, and it will keep being a negative factor for crude prices as it impacts global growth forecasts,” said Alfonso Esparza, senior market analyst at OANDA in Toronto.

Meanwhile, Goldman Sachs said growth in U.S. shale production was likely to outpace that of global demand at least through 2020, limiting gains in oil prices despite output curbs led by the Organization of the Petroleum Exporting Countries.

Prices are still susceptible to shocks from the lingering tensions in the Middle East, analyst and traders said.

Iran on Monday threatened to restart deactivated centrifuges and step up its enrichment of uranium to 20% in a move that further threatens the 2015 nuclear agreement that Washington abandoned last year.

Washington has imposed sanctions that eliminate benefits Iran was meant to receive in return for agreeing to curbs on its nuclear programme under the 2015 deal with world powers.

The confrontation has brought the United States and Iran close to conflict, with U.S. President Donald Trump calling off air strikes last month minutes before impact.

(Reporting by Aaron Sheldrick; Editing by Joseph Radford)

euronews provides breaking news articles from reuters as a service to its readers, but does not edit the articles it publishes. Articles appear on euronews.com for a limited time.