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Crude oil futures were lower in mid-morning trade in Asia Tuesday as trade tensions heightened between the US and China. shrugging off analyst expectations of a further draw in US crude stocks.
At 10:56 am Singapore time (0256 GMT). November ICE Brent crude futures were down 53 cents b (0.68%) from Monday`s settle at $77.52 b. while the NYMEX October light sweet crude contract was 32 cents b (0.46%) lower at $68.59 b.
Crude prices were under pressure after the US announced a fresh round of tariffs on $200 billion worth of Chinese goods Monday.
`With trade war dominating the landscape. even more so after this morning`s US tariff headlines. it`s easy to focus on markets from a one-dimensional perspective.` OANDA`s head of trading Stephen Innes said.
`With the US implementing a graduated tariff hike. starting with 10% on $200 billion and moving to 25% at the start of 2019. the ball is clearly in China`s court.` he added.
IG market strategist Pan Jingyi agreed. saying: `Asian markets are poised to slide under the shadows of the latest trade cloud with the Trump administration`s trade announcement packing more bite than expected. Look to the state of decline in the Asia region today [in equities markets]. with early movers certainly having gone ahead in red.`
The heightened tension over US-China tariffs saw the market largely shrugging off analyst expectations of a draw in US crude stocks in American Petroleum Institute and Energy Information Administration data due for release later Tuesday and Wednesday respectively.
US crude stocks were expected to fall 3 million barrels for the week ended September 14 amid strong US exports and refinery runs. according to a survey of analysts by S&.P Global Platts.
Gasoline stocks were expected to fall 1.6 million barrels. while the analysts surveyed were mixed on the direction of distillate stocks.
The EIA separately Monday forecast US shale oil output to average 7.59 million b d in October. rising 79.000 b d from September and surging almost 1.6 million b d from October 2017.
Industry sources said that outlook could also contribute to downward pressure on prices going forward.
As of 0256 GMT. the US Dollar Index was 0.34% lower at 94.165.
