Oil dips as markets remain cautious on trade concerns

SINGAPORE (Reuters) – Oil prices plummeted on Monday as prices last longer in the global markets.

Front-month Brent crude oil futures were at $ 77.56 a barrel at 0430 GMT, 6 cents below their last close.

Graphic: U.S. rig count – tmsnrt.rs/2OVjfgl

U.S. West Texas Intermediate (WTI) futures were at $ 67.59 per barrel, flat from their last settlement.

Sentiment among investors remained after last week.

"These are the conditions for growth in the outlook," said Benjamin Lu of Phillip Futures brokerage in Singapore.

Singapore-based ship tanker brokerage Eastport said stock prices were falling amid policy uncertainty, rising interest rates and disappointing earnings from some companies.

Financial market turmoil can "weigh on investment and consumer spending, reducing trade flows and ultimately hitting demand," it said.

Hedge funds slashed their bullish wagers on U.S. crude oil futures in the United States, the U.S. Commodity Futures Trading Commission said on Friday.

The speculator group cut its combined futures and options in New York and London by 42,644 contracts to 216,733 in the week to Oct. 23, the lowest level since September 2017.

There are also signs of a slowdown in global trade, with rates for dry-bulk and container-ships – which carry most raw materials and manufactured goods – coming under pressure.

On the supply side, however, oil markets remain tense ahead of looming U.S. sanctions against Iran's crude exports, which are expected to tighten supply, especially to Asia which takes most of Iran's shipments.

The tight market in Asia is visible in the low amount of oil stored in Singapore and southern Malaysia, the region's oil trading and storage hub.

Just four stationary supertankers are currently being supplied with crude oil, according to Refinitive Eikon ship tracking data.

That's down from around 15 years ago, and from 40 in mid-2016 during the peak of supply glut.

In North America, however, there is no oil shortage in the US as a percentage of oil barrels per day.

Production is set to rise further. U.S. drillers added two oil rigs in the week to Oct. 26, bringing the total count to 875, the highest level since March 2015, Baker Hughes energy services firm said on Friday.

More than half of all US oil rigs in the Permian Basin in West Texas and eastern New Mexico, the country's biggest shale oil training.