Oil prices fell on Wednesday as the intensifying Sino-US trade dispute stoked worries over demand, although a drop in US crude inventories offered some support to prices.
The international benchmark Brent crude futures were at $58.70 a barrel down 24 cents, or 0.41 per cent, from their previous settlement and trading near seven-month lows, while the West Texas Intermediate (WTI) crude futures fell 20 cents, or 0.37 per cent, from their last close to $53.43 per barrel.
“Crude oil prices remained under pressure as investors grappled with the impact of the trade conflict,” ANZ bank said in a note.
Brent prices have plunged more than 9 per cent in the past week after US President Donald Trump said he would slam a 10 per cent tariff on a further $300 billion in Chinese imports starting on September 1, sending global equity markets into a tailspin.
But Trump on Tuesday dismissed fears the trade row with China could be drawn out.
Meanwhile, Saudi Arabia Energy Minister Khalid Al-Falih and US Energy Secretary Rick Perry on Tuesday said both sides expressed concern over threats targeting freedom of maritime traffic in the Arabian Gulf as they met in Washington.
Tensions in the Middle East have heightened in the wake of attacks on tankers and US drones, raising concerns over passing through the Straight of Hormuz, a key shipping artery of global oil trade.
Elsewhere, data indicating a larger-than-expected drop in US crude stocks offered some support to oil prices.
US crude inventories fell by 3.4 million barrels in the week ended Aug.2 to 439.6 million barrels, compared with analyst expectations for a decrease of 2.8 million barrels.
Official data from the government’s Energy Information Administration, EIA, is due later on Wednesday.