A gas flare burns at a Russian oil refinery operated by Lukoil. Picture: BLOOMBERG
A gas flare burns at a Russian oil refinery operated by Lukoil. Picture: BLOOMBERG

Tokyo — Oil prices were falling for a second day on Tuesday, after more signs that global economic growth is being hit by US-China trade tensions, although losses were limited amid tensions in the Middle East after tanker attacks last week.

Brent crude futures were down 16c, or 0.3%, at $60.78 a barrel by 0215 GMT. They fell 1.7% in the previous session on concerns about slowing global growth.

US West Texas Intermediate (WTI) crude futures were down 12c, or 0.2%, at $51.92. They dropped 1.1% on Monday.

The New York Federal Reserve said on Monday that its gauge of business growth in New York state posted a record fall in June to its weakest level in more than two and a half years, suggesting an abrupt contraction in regional activity.

US business sentiment has sagged as tensions over trade have escalated between China and the US and on signs of softness in the labour market.

“The (oil) market is in a rut and desperately in need of some robust economic data to get it out of this funk,” said Stephen Innes, managing partner at Vanguard Markets in Bangkok.

Oil prices have fallen around 20% since 2019 highs reached in April, in part due to concerns about the US-China trade war and disappointing economic data.

US President Donald Trump and China’s President Xi Jinping could meet at the G20 summit in Japan later in June. Trump has said he would meet Xi at the event, although China has not confirmed the meeting.

Putting further pressure on oil, the US energy department said on Monday that shale oil output is expected to reach a record in July. But tensions in the Middle East are likely to keep prices supported, analysts said.

Acting US defence secretary Patrick Shanahan announced on Monday the deployment of 1,000 more troops to the Middle East for what he said were defensive purposes, citing concerns about a threat from Iran.

Fears of a confrontation between Iran and the US have mounted since last Thursday when two oil tankers were attacked, which Washington has blamed on Tehran. Iran has denied involvement.