Oil dips as US/China trade dispute expected to stall economic growth

Oil rallies as Iran sanctions kick in

Oil rallies as Iran sanctions kick in

The oil prices had a slightly downtrend movement in the week ending August 3, posting a fourth loss in the past five weeks.

Amid widespread concern that the revived US sanctions against Iran, which shipped out nearly three million barrels per day of crude in July, would tighten global supply, Brent crude oil futures rose 86 cents to $74.61 per barrel at 1052GMT and US West Texas Intermediate (WTI) crude futures were up 59 cents at $69.60 a barrel.

Meanwhile, traders looked ahead to a report from The American Petroleum Institute on US crude inventory, due this evening.

President Donald Trump has threatened to impose tariffs on almost all Chinese imports to the US.

Many European countries, China and India, oppose the sanctions, but the USA government said it wants as many countries as possible to stop buying Iranian oil.

"Of course, such decisions being taken by the US side are absolutely unfriendly and can hardly be associated with the. constructive atmosphere achieved at the latest meeting of the two presidents", he was quoted by Russian news agency Tass as saying.

Oil held a gain near $69 a barrel as United States crude inventories are seen declining. Following the announcement by EIA, the WTI lost 2.78 percent to 67.25 USA dollars, while Brent decreased 2.55 percent to 72.75 dollars. On one hand, fears of an all-out trade war provides resistance for the price to move higher.

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Goldman Sachs insists we are heading for a "very, very tight oil market".

However, many European countries, China and India, oppose the sanctions, but the U.S. government said it wants as many countries as possible to stop buying Iranian oil.

This time around, some of Iran's former creative methods in trade with Asian customers, including a barter system which avoids sanctionable transfers to the nation, may also work with the Europeans.

For U.S. crude exporters, India is a market ripe for expansion, given the voyage from the Gulf of Mexico to India's west coast takes about three weeks, much the same as it does to China's east coast. The US government has said it wants as many countries as possible to stop buying Iranian oil. The country exported nearly 3 million barrels per day (bpd) of crude in July. Nationwide inventories in the USA probably fell 3 million barrels last week, according to a Bloomberg survey of analysts before government data due on Wednesday.

Prior to this deal, International Olympic Committee had struck deals for importing 10 million barrels from six cargoes in the spot market.

Oil Minister Dharmendra Pradhan had last month told Parliament that Iran had in April-June overtaken Saudi Arabia to become the second largest supplier of crude oil to Indian public sector firms. Gasoline inventories increased by 2.9 million barrels, the data show.

Just last week, China's Unipec, the trading arm of state oil major Sinopec, suspended crude oil imports from the United States due to the growing trade spat between Washington and Beijing.

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