Oil falls after Libya ports reopen, Trump tariff threat

Lloyd Doyle
July 12, 2018

The specter of tariffs on a further $200 billion worth of Chinese goods sent commodities lower along with stock markets, as trade tensions between the world's two biggest economies intensified.

USA crude CLc1 fell $3.73, or 5 percent, to $70.38 a barrel. USA crude CLc1 was down $1.74 at $72.37 a barrel.

US crude oil stocks fell by almost 13 million barrels last week, the most in almost two years, dropping overall crude stocks to their lowest point since February 2015, the Energy Information Administration said on Wednesday.

Brent crude LCOc1 fell $5.46, or 6.9 percent, to settle at $73.40 a barrel. Hedge funds and other money managers with bullish wagers appeared to pare long positions, pulling back from long positions added as crude approached three and a half year highs last month, Saucer said.

"The trade concerns have bitten today and the reason is that this is above and beyond what the market was expecting", said Michael McCarthy, chief markets strategist at CMC Markets in Sydney.

In its monthly report, the Organization of the Petroleum Exporting Countries said buoyant world trade in 2017 and 2018 had helped impulse economic growth, and therefore demand for crude.

Oil's price fall was aided by news Tripoli-based National Oil Corp (NOC) had lifted a force majeure on four Libyan oil ports, saying production and exports from the terminals would "return to normal levels in the next few hours".

Adding to the bearish mood were signs of a possible relaxation of USA sanctions on Iranian crude exports.

In addition, overall crude imports declined on the week, falling to 7.4 million barrels per day, off by 1.3 million bpd from the week-earlier period.

However, oil prices have been volatile in recent weeks after the USA said it would reinstate sanctions against Iran, a major producer.

Washington had previously said countries must halt all imports of Iranian oil from November 4 or face US financial measures, with no exemptions.

US oil prices jumped on the news, but later retreated, though were still above the day's lows.

The falls came despite a United States government report that American crude oil stockpiles fell by more than 12 million barrels last week and are about 4% lower than average for this time of year.

Other reports by Iphone Fresh

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