TOKYO: Oil prices steadied on Tuesday, caught between rising tensions in the Middle East and signs that economic growth is being hit by trade tensions between the United States and China.
Brent crude futures were up 4 cents at $60.98 a barrel by 0055 GMT. They fell 1.7% in the previous session on concerns about slowing global growth.
U.S. West Texas Intermediate (WTI) crude futures were 1 cent lower at $51.92. They dropped 1.1% on Monday.
The New York Federal Reserve said on Monday its gauge of business growth in New York state posted a record fall this month to its weakest level in more than 2-1/2 years, suggesting an abrupt contraction in regional activity.
U.S. business sentiment has sagged as tensions over trade have escalated between China and the United States and on signs of softness in the labour market.
"The market is in a rut and desperately in need of some robust economic data to get it out of this funk," said Stephen Innes, managing partner at Vanguard Markets in Bangkok.
Oil prices have fallen around 20% since 2019 highs reached in April, in part due to concerns about the U.S.-China trade war and disappointing economic data.
U.S. President Donald Trump and China's President Xi Jinping could meet at the G20 summit in Japan later this month. Trump has said he would meet Xi at the summit, although China has not confirmed the meeting.
Putting further pressure on oil, the U.S. energy department said on Monday that shale oil output is expected to reach a record in July.
But tensions in the Middle East are likely to keep prices supported, analysts said.
Acting U.S. Defence Secretary Patrick Shanahan announced on Monday the deployment of about 1,000 more troops to the Middle East for what he said were defensive purposes, citing concerns about a threat from Iran.
Fears of a confrontation between Iran and the United States have mounted since last Thursday when two oil tankers were attacked, which Washington has blamed on Tehran. - Reuters
Oil prices fall 1% as economic worries outweigh tanker tensions
NEW YORK: Oil prices fell more than 1% on Monday after more poor Chinese economic figures fanned fears of lower worldwide oil demand.
Brent crude futures lost $1.07 to settle at $60.94 a barrel, a 1.73 percent loss. U.S. West Texas Intermediate (WTI) crude futures fell 58 cents to settle at $51.93 a barrel, a 1.10 percent loss.
Prices have fallen around 20% since a 2019 high reached in April, in part due to concerns about the U.S.-China trade war and disappointing economic data.
China's industrial output growth unexpectedly slowed to a more than 17-year low, data from the National Bureau of Statistics showed on Friday. It grew 5.0% in May from a year earlier, missing analysts' expectations of 5.5% and well below April's 5.4%.
U.S. President Donald Trump and China's President Xi Jinping could meet at the G20 summit in Japan later this month. Trump has said he would meet with Xi at the summit, although China has not confirmed the meeting.
"All the major reporting agencies are reporting that demand is going to be weaker," said Phil Flynn, an analyst at Price Futures Group in Chicago. "That has played into the market malaise. Things we would normally rally off of, we’re not."
Bank of America Merrill Lynch lowered its Brent price forecast to $63 per barrel from $68 a barrel for the second half of 2019 on faltering demand.
Worries remained about increased tensions in the Middle East following last week's attacks on two oil tankers in the Gulf of Oman. The United States blamed the attacks on Iran but Tehran denied involvement.
Saudi Arabian Energy Minister Khalid al-Falih said on Monday that countries need to cooperate on keeping shipping lanes open for oil and other energy supplies to ensure stable supplies.
Market participants also await a meeting between the Organization of the Petroleum Exporting Countries and other producers including Russia, a group known as OPEC+, to decide whether to extend a production cut agreement that ends this month.
The group has been considering since last month moving the date of their policy meeting in Vienna to July 3-4 from June 25-26. After a meeting on Monday, Iran's oil minister said he told his Russian counterpart that he still disagreed with the early July dates but could attend if the dates were shifted to July 10-12, the Iranian oil ministry's news agency SHANA reported.
OPEC+ agreed to cut output by 1.2 million barrels per day from Jan. 1.
In the United States, U.S. oil output from seven major shale formations is expected to rise by about 70,000 barrels per day (bpd) in July to a record 8.52 million bpd, the U.S. Energy Information Administration said in a monthly drilling productivity report on Monday. - Reuters