Picture: REUTERS
Picture: REUTERS

Singapore — Oil prices were stable on Friday, as the market balanced a fall in US crude inventories to the lowest levels since 2015, with China-US trade tension and economic weakness from emerging markets.

US West Texas Intermediate (WTI) crude futures were at $67.79 a barrel at 3.03am GMT, up just 2c from their last settlement.

International Brent crude futures dipped 4c to $76.46 a barrel.

"Oil inventory data released last night showed a larger-than-expected draw in crude inventories," said William O’Loughlin, investment analyst at Australia’s Rivkin Securities.

US commercial crude oil inventories fell by 4.3-million barrels to 401.49-million barrels in the week to August 31, the lowest since February 2015, US Energy Information Administration (EIA) data showed on Thursday.

Despite that, analysts said prices were curbed by a rise in refined product stocks and a relatively weak US peak fuel consumption season this summer.

Petrol stocks rose by 1.8-million barrels, while distillate stockpiles, which include diesel and heating oil, climbed by 3.1-million barrels, the EIA data showed.

"Gasoline and distillates inventories both rose substantially. The US summer driving season has proven to be a lacklustre one in terms of gasoline demand," said O’Loughlin.

Ongoing weakness in emerging markets as well as potential new US import tariffs on Chinese goods were also weighing on sentiment in the oil market, traders said.

Asian shares slipped to a 14-month trough on Friday as investors feared a new round of China-US tariffs, while currencies from Indonesia to India also remained under pressure.

On the supply side, US crude oil production last week remained at a record 11-million barrels a day, a level it has largely been at since July.

US sanctions against major oil producer Iran, which will target oil exports from November, are fuelling expectations of a tighter market towards the end of the year.

"The main driver of oil prices, in our view, remains the re-imposition of US … sanctions against consumers of Iranian oil," Standard Chartered said this week.

"There is still considerable uncertainty over the strategies of China and India, Iran’s main customers."

Washington has indicated it may offer temporary waivers to allied countries that are unable to immediately cease imports from Iran.

Reuters

Please sign in or register to comment.