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Tuesday 11

December, 2018 9:11 PM



Oil prices fall as demand concerns mount

Oil prices fall as demand concerns mount

Continuing concerns over global trade disputes, and Turkey's currency crisis, is hurting oil demand.

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By AAP 06.09.2018 07:30 AM

Oil prices fell more than one per cent after a US Gulf storm weakened and moved away from oil-producing areas and concerns mounted about global trade disputes and Turkey's currency crisis hurting demand.

US West Texas Intermediate crude futures fell $US1.15 on Wednesday to $US68.72 a barrel, a 1.65 per cent loss.

Brent crude futures fell 90 cents to settle at $US77.27 a barrel, a 1.15 per cent loss.

The global benchmark had climbed in the previous session to $US79.72 a barrel, its highest since May.

Both benchmarks fell further in post-settlement trade after data from industry group the American Petroleum Institute showed a slightly smaller than expected draw in US crude inventories.

Data was published a day later than usual because of the US Labor Day holiday on Monday.

Crude prices had jumped on Tuesday as oil companies shut dozens of offshore platforms in anticipation of damage from Tropical Storm Gordon.

The storm, however, never became a hurricane and by Wednesday energy companies and port operators along the US Gulf Coast took steps to resume operations.

In all, companies halted 156,907 barrels per day of oil production, according to estimates Tuesday by the US Bureau of Safety and Environmental Enforcement.

Oil also weakened as the United States-China trade dispute raised demand worries.

Trump could impose levies on $US200 billion more of Chinese imports after a public comment period on the new tariffs ends on Thursday.

OPEC Secretary-General Mohammad Barkindo said global trade disputes could hurt energy demand in the future.

Also weighing on crude futures was a currency crisis in Turkey.

The lira has fallen more than 40 per cent this year.

"Fears of Turkey's currency crisis spreading to other emerging markets have prompted demand-side concerns," said Abhishek Kumar, senior energy analyst at Interfax Energy.

US sanctions targeting Iran's oil sector from November are already reducing exports from OPEC's third-largest producer and counteracting the impact of an agreement by OPEC and its allies to pump more oil.

US President Donald Trump said on Wednesday he could not predict what would happen with Iran and it did not matter to him if Iran's leaders wanted to talk to him or not.

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