On Thursday, oil prices fell over the growing trade war between the United States and China. The oil inventory report declined despite the unexpected fall in crude stockpiles of the U.S.
Brent crude oil futures were down 44 cents or 0.63 percent. It was at $69.92 a barrel from their previous settlement.
On the other hand, U.S. West Texas Intermediate (WTI) crude futures were also down by 45 cents or 0.72 percent. It was at $61.67 per barrel from their last close.
This week, the Sino-U.S. trade battle made an impact on oil prices. And also, because of the escalating tensions between the two biggest economies in the world might upset the global economic outlook.
Then, last Wednesday, U.S. President Donald Trump stated China broke the deal from trade talks with Washington. Trump also added that if there is no deal, he will impose high tariffs on the opposing country.
Chinese Vice Premier Liu He has a two-day visit to Washington from Thursday. And markets are hoping the visit could change their decision on higher tariffs that will start on Friday.
The firmer global supply on the back of cuts in production by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, supported the oil prices. In addition to that, they both surged above 30 percent so far for this year.
Moreover, the U.S. sanctions on OPEC members Venezuela and Iran also stiffened global supply.
The head of trading at SPI Asset Management, Stephen Innes said, “OPEC supply discipline is still in check.”
Innes also added, “All of which suggests once the trade war-induced sell-offs abate conditions could settle themselves quickly.”
Meanwhile, the crude imports of China in April hit a record for the month with 10.6 barrels per day (bpd). It shows in the customs data on Wednesday. Also, China is now the largest oil importer.