Oil closed lower amid warnings that the U.S.-China trade dispute may take an increasing toll on the economy.
U.S. oil futures fluctuated between gains and losses on Tuesday, ending the session down 0.2%. Federal Reserve Bank of Boston President Eric Rosengren said the trade standoff is adding a downside risk to the central bank’s forecasts, while the Paris-based Organization for Economic Cooperation and Development downgraded its projection for global growth.
International benchmark Brent crude, meanwhile, finished the day 0.3% higher, as fighting in Saudi Arabia and Libya and a pipeline outage in Nigeria brought more reminders of the fragile state of supplies.
Oil has traded in a narrow band around $62 a barrel this month, as investor anticipation that OPEC and its allies may extend supply curbs has given the market some upward momentum. But rising crude stockpiles in the U.S. and the breakdown in trade talks between the world’s two biggest economies has kept any rally in check.
“Given the fact that the macro environment isn’t looking spectacular, oil is doing relatively well," said Bart Melek, head of commodity strategy at Toronto’s TD Securities. “It’s very much marching to its own drumbeat here, with the supply side being supportive in the face of less risk appetite."
West Texas Intermediate crude for June delivery, which expires Tuesday, fell 11 cents to $62.99 a barrel on the New York Mercantile Exchange. The more actively traded July contract was down 8 cents to $63.13.
Brent for July settlement rose 21 cents to $72.18 a barrel on the London-based ICE Futures Europe exchange. The first-month contract is trading at a strong premium to the second, a structure known as backwardation that’s an indicator of tight supply. The global crude benchmark traded at a $9.05 premium to WTI for the same month.
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