US-Chinese trade war, OPEC supplies are at the center of concerns

Oil prices fell on Wednesday, fearing that the Sino-US trade war will trigger a global economic slowdown, but a relatively limited supply given the OPEC production cuts and political tensions in the Middle East offered some support.

The benchmark international oil price index, Brent at the beginning of the month, stood at 69.85 USD at 0101 GMT, down 26 cents or 0.4% from the close of the month. the last session.

The WTI (West Texas Intermediate) futures price was $ 58.70 per barrel, down 44 cents or 0.7% from the previous settlement.

"Crude oil was weak … mainly because demand bearers are gaining against bullish supply," said James Mick, general manager and energy portfolio manager of the US group. Tortoise investment, in a podcast for investors.

"Investors are worried from the macroeconomic point of view of global demand, especially in the face of the growing trade dispute between the United States and China," he said.

Fawad Razaqzada, an badyst at Forex.com, said another concern was that "falling emerging market currencies make crude oil at a price in dollars more expensive to buy in those countries" and that crude prices could fall.

Despite economic concerns, global oil demand has held up well so far, averaging more than 100 million barrels a day this year, according to data from the US Energy Information Administration (EIA).

Analysts are concerned, however, that the credit crunch in the context of an economic slowdown is hampering commodity trade.

"We remain cautious about the short-term macroeconomic environment," said Marex Spectron, commodities broker.

"The availability of credit on physical commodity markets is of particular concern."

Despite economic worries in the oil markets, crude prices remain relatively tight.

"Supply risks remain at high levels with lingering geopolitical uncertainty in the Middle East, as well as Venezuela's well-known struggles," said Mick, of Tortoise.

Added to this is the continued reduction in supply that the Organization of the Petroleum Exporting Countries (OPEC) has been providing since the beginning of the year to support the market.

OPEC and some allies, including Russia, are scheduled to meet in late June or early July to discuss future production policy.