Oil Prices Mixed as Economic Concerns Weigh Markets Down

Oil prices traded mixed on Monday, as worries over slowing global economic growth put markets under pressure, but supply losses in Iran as a result of the US sanctions offered prices some support.

International benchmark Brent crude climbed 1.1 percent to $72.64 per barrel after suffering three straight weeks of decline last week.

US West Texas Intermediate (WTI) crude futures fell 0.03 percent to $65.19 per barrel after hitting a 7-week low in the previous week.

Commodities analyst Edward Bell said the recent softening in benchmark prices should temper the pace of growth in US exploration and production activity, leading to slower overall output increase.

An energy services firm reported that energy companies in the US left oil rig count unchanged at 869 last week.

Concerns about a global economic slowdown due to the US-China trade tensions and weakness in several emerging economies became the contributing factors for the crude’s limited gains.

Beijing and Washington are set to hold lower-level trade talks later this month, in an effort to avert a full-blown trade war that could jeopardize all trade between the world’s two largest economies.

A delegation from China, led by Vice Commerce Minister Wang Shouwen, will be meeting US officials led by Treasury undersecretary David Malpass in Washington on August 22 and August 23.

The US tariffs on another $16 billion worth of Chinese products and retaliatory tariffs from China on same value of US goods are slated to take effect after trade negotiations on August 23.

Still, White House economic advisor Larry Kudlow told Beijing not to underestimate US President Donald Trump’s decision in what Kudlow regarded as a battle to eliminate tariffs and non-tariff barriers and quotas, to prevent the stealing of intellectual property and to stop forced transfer of technology.

Trump has announced in July that he was ready to impose duties on all $500 billion of imported products from Beijing.

Data from the US government showed the import of about $505 billion of Chinese goods to the US in 2017 has resulted to a trade deficit of almost $376 billion, while Chinese imports from the US totaled $205 billion in the first five months of 2018, led to a deficit of $152 billion.

Supporting oil prices on Monday was the Trump administration’s financial sanctions against Iran, which is set to be imposed from November this year and is expected to impact the petroleum sector of the Organization of the Petroleum Exporting Countries’ (OPEC) third biggest producer.

In a meeting with OPEC Secretary-General Mohammad Barkindo on Sunday, Iran stated that no country should be allowed to take over the share of other members for production and exports of oil under any circumstance, and that the OPEC Ministerial Conference has not issued any license for such actions.

Iran on Monday has also urged the European Union (EU) to step up its efforts to save a 2015 nuclear agreement between Tehran and the major powers that Trump abandoned in May.

European states have been scrambling to ensure Iran has enough economic benefits to convince it to stay in the deal, which Trump described to be deeply flawed.

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