Investing.com - WTI crude oil prices settled marginally lower Thursday as traders weighed falling U.S. crude supplies against an escalating U.S.-China trade war that some fear could stifle global growth and reduce oil demand.
On the New York Mercantile Exchange crude futures for October delivery fell 3 cents to settle at $67.83 a barrel, while on London's Intercontinental Exchange, Brent fell 0.07% to trade at $74.73 barrel.
The United States imposed 25% tariffs on an additional $16 billion of Chinese goods just after midnight ET Thursday, prompting China to respond with in-kind measures against U.S. goods.
That renewed fears of a full-blown U.S. and China trade war, which could not only dent global growth but likely lead to a slowdown in oil demand.
The IEA recently warned "trade tensions might escalate and lead to slower economic growth, and in turn lower oil demand." This could dent oil prices, the IEA said, as it would alleviate the pressure on already low spare oil capacity amid expectations that U.S. sanctions on Iran will pressure global oil supplies.
President Donald Trump pulled the United States out of the Iran nuclear agreement in May, allowing sanctions against Iran to snap back into place. The first wave of sanctions went into effect last month and a second set of sanctions on Iran's crude exports are slated for early November.
Analysts have estimated that as much as one million barrels of crude a day could be wiped out from the global market.
Crude oil prices are on track to snap a three-week losing streak after rising 3% Wednesday on the back a government data showing a larger-than-expected fall in U.S. crude supplies last week.
Inventories of U.S. crude fell by 5.836 million barrels for the week ended Aug. 17, well above expectations for a draw of 1.497 million barrels, according to data from the EIA.
The large draw in crude supplies emerged as imports fell by about 1.059 million barrels a day (bpd), while exports fell by 2.58 million bpd, data from EIA showed.
Oil-market observers will likely turn to the Baker Hughes rig count data Friday for signs that U.S. output continues to tighten after data on Wednesday showed U.S. oil output continued to expand.