Oil prices fell on Thursday as concerns about the global economic slowdown due to the trade war between the United States and China dwarfed the scarcity of supply in the oil market and the growing political tensions in the Middle East.
Brent futures fell sharply to $66.60 per barrel by the end of Thursday’s session, compared to the previous closing at $69.66 per barrel.
A senior Chinese diplomat stepped up the war of words against the United States on Thursday by describing Washington's actions as “naked economic terrorism”.
China hit back by suspending their purchases of American soybeans, reigniting the trade war with the U.S., according to Bloomberg.
U.S. crude inventories dropped nearly 300,000 barrels last week, less than the 900,000-barrel fall predicted by analysts, according to the Energy Information Administration (EIA) report released on Thursday. The report added further negative pressure on oil prices.
However, crude prices receive support in recent months from the production cuts carried out by the Organization of Petroleum Exporting Countries (OPEC) and other major producers as well as the decline in Iran's supply.
Iran's oil exports fell in May for less than half of April levels to about 400,000 barrels a day after the United States tightened sanctions on Tehran's main income source. Iran needs to export at least 1.5 million to two million barrels per day of crude to achieve a budget without deficit.
The dollar index rose to a one-week high of
98.18, extending its advance for a fourth straight session and set for a weekly