Oil falls on trade dispute, Iran sanctions tighten outlook

FILE PHOTO A worker inspects a pump jack at an oil field in Tacheng, Xinjiang Uighur Autonomous Region, China - REUTERS

London (Reuters): Oil prices fell on Friday on concerns that global trade disputes will slow economic growth and demand for fuel, but losses were limited by US sanctions against Iran which look set to tighten supply.

Benchmark Brent crude oil was down 30 cents a barrel at $71.77 by 0845 GMT. US light crude was 30 cents lower at $66.51 a barrel.

Escalating trade tensions are casting a shadow over the outlook for economic growth and pushing up the dollar, the currency in which oil is traded internationally, making it more expensive for consumers using other currencies.

Major emerging economies including China, India and Turkey have all seen their currencies slump.

“Oil, like other commodities, is responding to dollar strength this morning,” Harry Tchilinguirian, head of oil strategy at French bank BNP Paribas in London, told the Reuters Global Oil Forum.

For the week, Brent is set for a near 2% fall, while US light crude is heading for a drop of nearly 3% percent

“The market seems to be focused on fears of reduced demand from China, partially due to the effects of the trade wars between China and the United States,” said William O’Loughlin, investment analyst at Australia’s Rivkin Securities.

In the latest round of tariffs, China said it would impose additional tariffs of 25% on $16 billion worth of US imports.