Oil edges up on US sanctions against Iran, but trade dispute weighs
SINGAPORE (Reuters) - Oil prices edged up on Tuesday, supported by expectations of supply cuts once US sanctions against Iran bite in November, but capped by worries a Sino-US trade dispute will drag on fuel demand growth.
Brent crude oil futures LCOc1 were at $72.24 per barrel at 0104 GMT, up 3 cents from their last close.
US West Texas Intermediate (WTI) crude futures CLc1 were up 24 cents, or 0.4 percent, at $66.67 per barrel.
Traders said prices were lifted by expectations of a drop in supply once US sanctions against major oil exporter Iran take effect from November.
In an attempt to prevent prices from spiking because of the potential supply reduction, the United States offered 11 million barrels of crude from its Strategic Petroleum Reserve (SPR) for delivery from October 1 to November 30.
Because of the looming supply disruption from Iran, French bank BNP Paribas said it expected oil production from the Organization of the Petroleum Exporting Countries (OPEC), of which Iran is a member, to fall from an average of 32.1 million barrels per day (bpd) in 2018 to 31.7 million bpd in 2019.
Despite this, traders said overall oil market sentiment was cautious because of concerns over the demand outlook amid trade disputes between the United States and China.
A Chinese trade delegation is due in Washington this week to resolve the dispute, but US President Donald Trump told Reuters in an interview that he does not expect much progress, and that resolving the trade dispute with China will “take time.”