Published: Wed, July 10, 2019
Finance | By Loren Pratt

Oil prices drop on signs global economy slowing amid trade disputes

Oil prices drop on signs global economy slowing amid trade disputes

-China trade war that has dampened prospects for global economic growth. While demand is expected to seasonally improve in the second half of this year, OPEC expects the H1 slowdown in the global economy to be "further challenged" through the rest of the year.

Supporting prices was an Iranian military official's comments that Britain's seizure last week of an Iranian oil tanker off the coast of Gibraltar will not be "unanswered", according to the semi-official Tasnim news agency.

Tensions around Iran's nuclear program and recent incidents involving oil tankers also support prices; Iran's Pres. Rouhani says the United Kingdom will face "consequences" over the seizure of an Iranian tanker near the coast of Gibraltar last week. "From January 2018 to April 2019, Texas crude oil production increased by 1.1 Mmbpd (28%) and New Mexico production increased by 345,000 Bpd (64%)".

Washington has imposed sanctions that get rid of advantages Iran was meant to obtain in return for agreeing to constrain on its nuclear program underneath the 2015 cope with world powers.

Analysts said the rise in crude oil futures was largely in tandem with a firming trend in global trade.

Operations at the Louisiana Offshore Oil Port, the only USA port where the largest crude tankers can operate, were normal on Wednesday morning, a spokeswoman said. "There has been no progress in the U.S". The nations are the world's two largest oil shoppers. 'President Trump wants to be re-elected and will therefore be prepared to sign a trade deal, probably in 4Q, that doesn't necessarily meet all of his initial demands, ' says Mark Cliffe, Chief Economist and Head of Global Research of the ING Group.

Focus on EIA crude stocks data amid US-China trade talks, Powell's testimony.

The U.S. and global benchmarks have gained this year as the Organization of the Petroleum Exporting Countries (OPEC) and big producers such as Russian Federation have curbed output to bolster prices. While the OPEC+ alliance can and does calibrate its own production, it is not in control of the current key drivers of the oil market-demand growth and rival oil supply.

US crude stockpiles are forecast to fall 3.6 million barrels in a fourth consecutive weekly decline. The first weekly supply report is due at 4:30 p.m. EDT (2030 GMT) from the American Petroleum Institute, an industry group, followed by the EIA on Wednesday morning.

Still, U.S. crude oil production is forecast to rise to a fresh record of 12.36 million barrels per day (bpd) in 2019 from the high of 10.96 million bpd previous year, the EIA's Short Term Energy Outlook said on Tuesday.

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