LONDON: Brent oil held steady near $70 a barrel on Wednesday as record Chinese imports and tighter global supplies eased concerns about a deepening trade spat between the United States and China.
US sanctions on crude exporters Iran and Venezuela as well as supply cuts by OPEC and Russia also supported prices. Brent crude futures were at $69.78 per barrel by 0902 GMT, down $0.10 or 0.14%. US crude futures were at $61.47 per barrel, up $0.07 or 0.1%.
“It has been a less than auspicious start to the month for the energy complex. Oil prices had rallied about 40% since the beginning of the year but the move higher has for now been put on the back burner,” said Stephen Brennock, analyst at London-based oil brokerage PVM.
China’s crude imports in April hit a record for the month of 10.64 million barrels per day (bpd), customs data showed on Wednesday. That is an 11% rise from the same month last year. The country is the world’s largest oil importer.
Oil prices had fallen earlier this week due to announcements from Washington that the United States would further raise tariffs on Chinese goods on Friday.
“The focus now will be on the two days of talks in Washington scheduled to take place between US and Chinese officials,” said Jasper Lawler, Head of Research at futures brokerage London Capital Group.
Before that, prices had rallied on a tightening of US sanctions on Iran with the aim of reducing oil exports from the key producer to zero.
Iran has said it will defy the sanctions. It also said it would stop implementing “some commitments” under a 2015 nuclear deal if it was not allowed to export oil. Oil prices slump after Trump’s tariff threat against China.
Most analysts expect Iran’s crude exports to fall to little more than 500,000 bpd, down from around 1 million bpd in April, as governments largely bow to US pressure. Washington has also slapped sanctions on Venezuelan oil exports.
Both sets of sanctions come amid already tight supply as the Organisation of the Petroleum Exporting Countries (OPEC) has been withholding output this year to prop up prices.
US Energy Secretary Rick Perry said on Tuesday that Saudi Arabia, OPEC’s de facto leader, would increase its oil production to meet needs arising from sanctions on Iran.
But on Wednesday, Azerbaijan’s oil minister said it had received assurances from Saudi Arabia that Riyadh would not take any unilateral decisions on the global oil deal until OPEC’s June meeting.
