Oil prices were down early on Tuesday, with Brent Crude hitting its lowest level since January and WTI Crude at its lowest since February as trade disputes continued to weigh on the outlook on global economic and oil demand growth.
As of 09:56 a.m. EDT on Tuesday, WTI Crude was down 0.28 percent at $53.10, trading at its lowest levels since the middle of February, while Brent Crude was down 0.49 percent at $60.98—breaking below $61 a barrel and slumping earlier in the day to its lowest level since January this year.
Oil prices are now down by some 20 percent from the highs reached at the end of April.
In May, the protracted U.S.-China trade war and soaring U.S. oil production and inventories weighed down on the price of oil, which booked its worst monthly decline since November last year.
Analysts have started to warn that the U.S.-China trade conflict and the new trade dispute that the U.S. opened with Mexico just last week will start to impact global economic growth and lead to slowdown in economic activity and oil demand growth.
Fearing an economic slowdown, investors have been seeking safe-haven assets in recent days, with gold prices at a three-month high, while shunning energy stocks and oil futures.
On Monday, Saudi Arabia tried to stop the oil price slide and talk prices up by reiterating that the Kingdom and OPEC would do “whatever it takes” to rebalance the oil market.
Oil prices ignored the Saudi reassurance, Warren Patterson, Head of Commodities Strategy at ING, said on Tuesday, noting that the market continues to be under pressure from the broader macro picture.
“While we do not believe that the market needs to see cuts extended, we do believe that given the pressure on the flat price that OPEC+ will be forced to extend its deal into the second half of the year,” Patterson said.
By Tsvetana Paraskova for Oilprice.com
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