Investing.com – WTI crude oil prices settled lower Friday, on signs of expanding U.S. output and fears over lower oil-demand growth amid rising global trade tensions.
On the New York Mercantile Exchange for October delivery fell 45 cents to settle at $69.80 a barrel, while on London’s Intercontinental Exchange, fell 0.55% to trade at $77.59 a barrel.
Oilfield services firm Baker Hughes reported on Friday that the number of U.S. oil drilling rigs in operation rose by 2 to 862.
The drop in rig counts, pointing to signs of expanding output, comes as data, released earlier this week, showed rising U.S. output steadied at 11.0 million barrels a day, unchanged from the prior week.
Renewed concerns over an escalation in the U.S.-China trade war stoked fears of lower oil demand growth, adding to downside momentum in oil prices. China, the world’s largest commodity importer, has seen economic growth dwindle since the trade war with the U.S. kicked off, and a further escalation could dent growth, forcing Beijing to rein in crude imports.
Oil prices ended the month nearly 2% higher as bets on renewed global supply shortage as U.S. sanctions on Iran’s crude exports are expected to reduce crude from market, underpinning higher crude prices.
“Press reports indicate that Iranian crude oil and condensate exports in August are poised to drop below 2.25 million barrels a day – marking three straight monthly declines, a 600,000bpd drop versus April and helping crystallize the risk that US sanctions squeeze global oil supply placing upward pressure on international prices,” Bank of American Merrill Lynch said in note to clients.
Both WTI and Brent crude are expected gain on a potential slump in Iranian exports, although gains in WTI prices will be limited as the refinery maintenance season is set to get underway.
“An active maintenance season in the US Mid-Continent may prevent the WTI benchmark increasing,” according to Bank of American Merrill Lynch.
Maintenance season tends to halt refinery activity, slowing demand for crude stockpiles used as inputs in the production of product inventories like gasoline.
Oil prices were also helped earlier in the week by an EIA report showing crude oil stockpiles than expected.
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Source: Investing.com