Oil slips near 5-week low as trade fear offsets supply risk

Bloomberg

Oil traded near a five-week low as concern over supply losses from Iran to Russia were offset by high American stockpiles and fears that if US-China trade talks fail it could dent global demand.
Futures erased earlier gains to fall as much as 0.5 percent in New York after a 1.4 percent plunge.
Russian tankers continue to hold Urals crude exported from the country’s Baltic Sea port of Ust-Luga, a sign that contamination issues remain unresolved. Meanwhile, US crude stockpiles climbed by 2.81 million barrels last week, though gasoline inventories fell by a similar amount, the American Petroleum Institute was said to report.
The oil market has been benign in its response to the threat of supply losses from Iran following the end of US sanctions waivers on its exports. Prices were down even after the Islamic Republic’s threat to stop observing restrictions on uranium enrichment if Europe doesn’t abide by commitments on oil and banking.
Oil’s rally went into reverse late last month due to speculation that Saudi Arabia and other members of the Organization of Petroleum Exporting Countries would fill the gap created by the loss of Iranian barrels. Meanwhile, signals that the global economic outlook is improving had been preventing steeper declines, but that’s now been thrown into doubt by the White House’s plan to raise tariffs on Chinese imports. A delegation from Beijing is still set to visit Washington this week for talks.
“It has been a less than auspicious start to the month for the energy complex,” PVM Oil Associates Ltd. analyst Stephen Brennock wrote in a report. “The API provided additional bearish fodder after reporting another increase in US crude stocks.”
West Texas Intermediate crude for June delivery lost 25 cents, or 0.4 percent, to $61.15 a barrel on the New York Mercantile Exchange in London, having earlier added as much as 1.1%.
The contract dropped by 85 cents to $61.40, the lowest close since March 29.
Brent for July settlement fell 43 cents, or 0.6 percent, to $69.45 a barrel on the London-based ICE Futures Europe exchange.
It closed at $69.88, the lowest since April 4. The global benchmark crude was at a premium of $8.20 to WTI for the same month.