Oil prices at highest level in three years

  • Oil prices at highest level in three years

Oil prices at highest level in three years

"The Chinese have to do the tit-for-tat, they have to retaliate", said John Driscoll, director of consultancy JTD Energy, adding that cutting USA crude imports was a means "of retaliating (against) the United States in a very substantial way".

Asian oil refiners are racing to secure crude supplies in anticipation of an escalating trade war between the United States and China, and as Washington plans tough sanctions against Iran aimed at shutting the country out of oil markets.

Looming larger over markets is the U.S./China trade dispute.

Beijing has threatened a 25 percent tariff on USA crude imports, although it has not specified an introduction date.

"If the Saudis and others replace the losses from Iran, there will be basically no spare capacity left", Societe Generale analyst Michael Wittner said.

US West Texas Intermediate and global bench-mark Brent crude oil futures are trading mixed in limited action.

West Texas Intermediate rose 61 cents to settle at $73.55, while Brent declined by 39 cents to $77 per barrel.

Weighing on prices was a rise in U.S. crude inventories C-STK-T-EIA of 1.2 million barrels in the week to June 29, to 417.88 million barrels, the U.S. Energy Administration (EIA) said on Thursday. In May, Indian refiners imported 4.7 million barrels or about nine times more than April and the most of any month based on USA government data going back to 2015.

Additionally, gasoline stockpiles fell by 1.5 million barrels for the week, but distillate stockpiles were up by 100,000 barrels for the week, according to the EIA.

China has said it will impose tariffs on 545 USA goods in return.

American crude shipments to China now stand around 400,000 barrels per day (bpd), worth $1 billion a month at current prices.

He added his refinery had canceled USA crude orders and would switch to Middle East or West African supplies instead.

USA gasoline prices are at a four-year-high this year as a result of the higher price of crude.

In other news, potential supply shortages continue to be the hot topic. Additionally, about 300,000 bpd of Libyan oil has been taken off the market.

"Looming U.S. sanctions on Iran, however, are causing serious concerns amongst market players". While as much as 2.3 million barrels a day of crude from the Persian Gulf state at risk per Trump's sanctions, the White House has yet to get responses from China, while India or Turkey have already hinted they would defy Trump and keep importing Iranian oil.

OPEC and other producers including Russian Federation agreed last month to boost output by around a million barrels a day, reversing course after supply cuts that cleared a global glut and boosted prices.