On Tuesday’s trading session, “black gold” major benchmark prices are significantly reduced, and have mirrored the downshift in global economic growth expectations owing to escalating U.S. – China trade war tensions.
In this regard, the oil market traders fear that oil prices would low amid weakening demand for the “black gold”. August Brent North Sea crude oil settled -1.31% lower, to finish at $60.48 a barrel on ICE Futures Europe. West Texas Intermediate (WTI) crude for July delivery, dropped -1.15%, to settle at $52.64 a barrel on the New York Mercantile Exchange, Prime reports.
According to experts, despite comments of the Energy Minister of Saudi Arabia Khalid al-Falih that OPEC+ countries would extend supply cuts supported prices, there are concerns that U.S. tariffs on China and Mexico would hurt demand weakened crude market sentiment.
Concern that a U.S.-China trade war and the further growth of proposals from the US shale companies would diminish global crude demand weighs on oil prices.
In addition, according to experts, the position of oil producers are not as consolidated as before. Analysts believe that if Saudi Arabia insists on further cut of crude oil production, then Russia, having completed its quota for the first time in May, is ready to ease the terms of the OPEC+ agreement.
At the same time, crude oil prices are likely to remain steady around current levels, as growing macro uncertainties, rising U.S. output and large availability of core OPEC nations’ spare capacity will offset supply constraints from Iran and Venezuela, Goldman Sachs said in a note to investors published on Monday.