Oil tumbles on slowing Chinese demand, U.S.-China trade spat

Oil firm

At 7:25 a.m. EDT on Thursday, WTI Crude was trading down 0.12 percent at $66.86, while Brent Crude was up 0.17 percent at $72.40, holding steady after a 3-percent plunge yesterday, when China and the United States traded a new round of tariffs and counter-tariffs on US$16 billion worth of each others' imports, with China slapping tariffs on 333 USA goods, including petroleum products. Last week's U.S. EIA crude oil inventories jumped significantly, putting downward pressure on oil prices before finding some support in the latter half of the week. The negative trend in oil prices also harmed by the rise of the dollar exchange rate, which leads to the weakening of other commodities priced in the United States currency, such as crude oil.

India first imported United States crude oil in October a year ago and has since then oil firms have been buying oil from that country on a tender basis.

Crude oil prices are under pressure because a tariff on imported USA crude oil means a drop in demand.

Sen added that Iranian production falling by 1.5 million bpd by year end could wind up being a conservative figure, and Bank of American Merrill Lynch pointed out in a research note that "for every 1 million bpd imbalance, we see a price impact on Brent of around $17".

The action, followed by another set of sanctions scheduled for November, will bring USA sanctions against Iran to the level on par with those prior to a major multilateral nuclear deal reached in 2015.

Oil has declined about 7 percent from the highs of June as trade tensions between the USA and China imperil economic growth and energy demand.

Analysts expect Iranian crude exports to fall by between 500,000 and 1.3 million barrels per day, with buyers in Japan, South Korea and India already dialling back orders.

Both benchmarks tumbled more than 3 percent on Wednesday after USA data showed a smaller-than-expected weekly draw in crude inventories and a surprise build of 2.9 million barrels in gasoline supplies.

Crude oil continues to rise bullish as traders remained anxious over revived USA sanctions against major crude exporter Iran. From November, Washington will also target Iran's petroleum sector.

International Olympic Committee and other state firms like Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) enter into annual term import deals with national oil companies of mostly Middle East countries.

China's announcement came just a day after the U.S. Trade Representative's office released a finalized list of $16 billion worth in Chinese goods that will be hit with tariffs, effective August 23. That's more than double the three-million-barrel decline predicted in a Bloomberg survey before Energy Information Administration data.

Iranian crude oil loadings to China and India increased significantly in July compared to the previous month despite USA threats, a Platts survey showed.

Further out, Weekly Distillate Stocks rose by 1.230 mbpd and Gasoline inventories unexpectedly increased by 2.900 mbpd.

For the past week, crude imports averaged 7.9 million barrels a day, up by 182,000 compared with the previous week.

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