Oil Prices Slide On Escalating Trade Tensions And Demand Concerns

Middle East tensions to support Brent near $70 this year: poll

Oil Prices Extend Losses Amid Tension Between Mexico, U.S.

Because of weakening demand, Bernstein said "any upside is capped" in oil markets despite relatively tight supply.

Both contracts were set for a monthly decline.

Oil prices dropped 1.5% percent on Friday to their lowest in almost three months after U.S. President Donald Trump said he would impose tariffs on imports from Mexico, stoking fears about global economic growth.

Also helping prop up prices were falling supplies from Opec members Iran and Venezuela due to USA sanctions.

Concerns over trade tensions between the United States and China have mounted after reports that China is considering restricting the export of rare earth elements.

Supply constraints linked to the Organization of the Petroleum Exporting Countries' output cuts and political tensions in the Middle East offered some support, however. The prospect of a protracted trade war between the world's two largest economies has had investors and traders anxious that global economic growth will slow down, dragging down global oil demand growth with it. Wall Street's main indexes hit more than two-month lows on Wednesday.

Crude prices have also been under pressure from a much smaller-than-expected decline in US stockpiles and USA crude oil production's return to its record 12.3 million barrels per day.

Since Opec and its allies started withholding supply in January, oil prices have risen by about 30 per cent.

As of 08:45 a.m. EDT on Thursday WTI Crude was down 2.09 percent at $55.41, while Brent Crude was trading down 2.14 percent at $63.93.

Iranian May crude exports dropped to less than half of April levels, at roughly 400,000 barrels per day (Bpd) after the US tightened sanctions on Tehran's main source of income.

"The last time it was any higher in this segment was in September 2013", Commerzbank said. At the beginning of the year, OPEC and allies agreed to cut production by 1.2 million bpd. Russian First Deputy Prime Minister Anton Siluanov said on Wednesday that the country would consider a possible extension of its oil output reduction agreement.

"We expect markets to remain underwhelming until the meeting has taken place as investors look to avoid taking risks until the picture is much clearer".

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