Crude prices continued falling on Wednesday, dragged down by fears of slowing global growth from the US-Sino trade war. US President Donald Trump’s threats to place tariffs on Mexican imports have added to concerns.
Brent futures were down 27 cents, or 0.4 percent, at $61.70 a barrel as of 9:20am GMT. US West Texas Intermediate (WTI) crude fell 0.9 percent, to $52.98 a barrel. The US benchmark closed 0.4 percent higher on Tuesday.
Oil was hovering on the edge of a bear market after falling almost 20 percent from a peak in late April over US trade policy fears that the global economy is headed for a sharp slowdown.
“Markets are bearish with the outlook for slowing growth in global crude demand, as well as rising US production leading to a glut,” Miyoko Nakashima, a senior strategist at Mizuho Securities in Tokyo told Bloomberg.
Even if the Organization of the Petroleum Exporting Countries (OPEC) cuts output further, WTI crude futures may only rise to about $60 a barrel as the trade conflicts will limit demand growth, she said.
To prevent oversupply and prop up the market, OPEC, together with allies including Russia, has been withholding production since the start of the year. The group plans to meet later this month or in early July to decide whether to continue to curb supply.