Oil prices stabilised on Monday as worries over production losses were outweighed by concerns that trade disputes would reduce economic growth and hit global energy demand.
Benchmark Brent crude oil LCOc1 was up 15 cents at 73.22 dollars a barrel by 7.50 GMT while U.S. light crude CLc1 was unchanged at 68.26 dollars.
Finance ministers and central bank governors from the world’s 20 biggest economies ended a meeting in Buenos Aires over the weekend calling for more dialogue to prevent trade and geopolitical tensions from hurting growth.
“Downside risks over the short and medium term have increased,” the finance leaders said in a statement.
The talks occurred amid escalating rhetoric in a trade dispute between the United States and China, the world’s largest economies, which have already slapped tariffs on 34 billion dollars worth of each other’s goods.
President Donald Trump threatened on Friday to impose tariffs on all 500 billion dollars of Chinese exports to the U.S. unless Beijing agreed major changes to its technology transfer, industrial subsidy and joint venture policies.
Economic and oil demand growth are closely correlated as expanding economies support fuel consumption for trade and travel, as well as for automobiles.
Worries over the impact of a trade war have balanced concerns over production losses and lack of supply at a time of rising demand.
U.S. energy companies last week cut the number of oil rigs by the most since March following recent declines in oil prices.
Drillers cut five oil rigs in the week to July 20, bringing the count down to 858, Baker Hughes energy services firm said on Friday.
The U.S. rig count, an early indicator of future output, is higher than a year ago, when 764 rigs were active as energy companies have been ramping up production in anticipation of higher prices in 2018 than previous years.
Hedge funds and money managers cut their bullish wagers on U.S. crude for the first time in nearly a month, a further sign of weaker sentiment for the market, the U.S. Commodity Futures Trading Commission said on Friday.
Most of the reduction occurred as money managers reduced their long position, or bets that oil prices would rise.
The market seemed unperturbed after Trump warned Iran not to threaten the U. S. or face consequences, with oil prices little changed after he sent a tweet – written all in uppercase – directed at Iranian President Hassan Rouhani.