Mubasher: Oil prices eased on early Friday as concerns over trade rifts between the US and the world’s major economies mounted, although the market remained tight on the back of supply disruption and high demand.
Global Brent crude futures fell 0.4% to $77.54 per barrel (pb) from their last trading session, while US Nymex futures went down 0.5% to $73.06 pb from their last close, after hitting a record high of $74.03 pb Thursday.
The falling prices came ahead of the oil rig count data by Baker Hughes due to be released later in the day.
Traders were concerned that escalating tariffs on export goods, including US crude oil, would stall trade activity, eventually stifling global economic growth.
“The macroeconomic outlook was “overwhelmingly bearish,” Commodities brokerage Marex Spectron told Thomson Reuters this week.
On the other hand, oil markets remained tight, as the supply disruption at Syncrude in Canada locked in over 300,000 barrels per day (bpd), while the repairs would last to at least through July.
Moreover, oil prices have been soaring for most of the year due to the record growth in demand and voluntary supply curbs led by the members of the Organization of Petroleum Exporting Countries (OPEC) and non-OPEC producers, including Russia.
Looming US sanctions against OPEC exporter Iran also buttressed Brent prices, while unexpected supply shortage from Libya and Venezuela have further tightened the market.
Moreover, Washington this week urged its allies to cut their crude purchases from Iran by November when the sanctions against Tehran would take effect while major buyers of Iranian oil indicated that they would cease their imports, unless they receive waivers from the sanctions.
However, the group said that it will ramp up output in order meet high demand, moderate oil market, and offset unplanned disruption.
“The clear message from the OPEC+ [the group and their allies] meetings was that those countries with spare capacity would increase production to keep the market well-supplied,” US Jefferies bank told Reuters on Friday
A feasible 1 million bpd from the group in July would offset the potential drop in Iranian output, and other shortages elsewhere during the second half of the year.
By 7:05 am GMT, Brent futures shed 0.04% to $77.82 pb, while Nymex crude futures fell 0.18% to $73.32 pb.
This article provided by NewsEdge.