Oil declines with the increase in American stock and fears of a trade war economy

Oil prices fell today, Wednesday, with the increase in the American stock and the fears of a new trade war between China and the United States, which overwhelmed President Donald Trump’s renewed efforts to eliminate Iranian crude exports.

Brent crude futures fell 59 cents, 0.77% to $ 75.60, and US West Texas Intermediate crude lost 59 cents, 0.78% to $ 72.13 in the latest dealings.

Yesterday’s performance

West Texas Intermediate crude fell at some point yesterday, Tuesday, 3%, the lowest level since last December 31 after China announced the imposition of customs duties on US oil, liquefied and charcoal imports in response to American fees on Chinese exports.

But the prices recovered after Trump returned the campaign to “the maximum pressure” on Iran to reduce its nuclear program that he approved in his first term, which reduced Iranian crude exports to zero with the aim of preventing Tehran from developing nuclear weapons.

John Rong Yip, a market expert at IG, said that the data issued last night and showed the height of US crude stocks more than expected affected the market today.

Sources in the market, quoting the figures of the American Petroleum Institute, indicated that crude stocks rose 5.03 million barrels in the week ending January 31.

The sources reported that gasoline stocks increased 5.43 million barrels, and the distillation products decreased by 6.98 million barrels.

Fears

The official oil stocks of the US government are scheduled to be issued today, Wednesday.

Increasing crude oil and fuel stocks in the largest oil consumer in the world indicate poor consumption, which increases investor concerns about the impact of customs duties on global economic expectations and estimates for energy demand.

Analysts at “Goldman Sachs” in a memorandum on Tuesday said that the impact of Chinese reprisals on energy prices will be limited “given that the global supply and demand for these basic commodities will not be affected by the Chinese customs duties.

They added that the two countries will be able to find alternative markets.

Despite Trump’s statement that he was open to an agreement with Iran, he signed a presidential memorandum that brings the United States to a strict policy towards Tehran.

Analysts at AN Z said today, Wednesday, based on shipping data that Trump’s plan may affect about 1.5 million barrels per day of oil exported by Iran.