Daily Times

Oil prices steadied on Friday as an escalating trade dispute between the United States and other major economies cast doubt on future demand growth, but markets stayed tight due to supply disruptions and looming US sanctions against Iran.

US light crude oil was 20 cents lower at $73.25 per barrel by 0905 GMT. On Thursday, the contract hit its highest since November 2014 at $74.03 per barrel.

Brent crude was up 40 cents at $78.25 a barrel.

Trade disputes between the United States on one side and major economies including China, India and the European Union on the other are beginning to cloud the outlook for global economic growth.

Investors worry that tariffs on exports, including US crude oil, will hamper the flow of goods and stall trading and eventually hit demand for oil.

Commodities brokerage Marex Spectron said this week that the macroeconomic outlook was “overwhelmingly bearish”.

Despite the trade dispute, oil supply is tight.

North American oil stocks have fallen as an outage at Canada’s Syncrude has locked in more than 300,000 barrels per day (bpd) of production. The outage is expected to last at least through July, according to operator Suncor Energy.

Outside North America, record demand and voluntary supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) have pushed up prices.

Unplanned supply disruptions from Libya to Venezuela have further tightened the market.

OPEC and Russia have said they will raise output to meet demand and replace crude from unplanned disruptions but many analysts think the extra supply may be inadequate.

Published in Daily Times, June 30^th 2018.