According to oilprice.com, Brent oil price hit the lowest level since January and down by over 25% from the highest peak of the year reached in April. -China trade war stoked concerns over global economic growth and future demand for crude. "These fears are heightened by the International Energy Agency reporting that supply exceeded demand by about 0.9 million barrels per day (bpd) in the first six months of this year".
-China trade spat threatened to expand into a currency war and investors despaired about the damage to crude demand. "China trade spat have been overshadowing potential supply risks in the Middle East", said Sungchil Will Yun, a commodities analyst at HI Investment & Futures Corp.in Seoul.
Oil prices fell despite U.S. President Donald Trump signing an executive order, declaring a total economic embargo against Venezuela, prohibiting transactions with the country, unless specifically exempted.
The price of crude oil has posted a 7-month low, declining by 4% to $57 a barrel in two days.
Oil prices tumbled almost 5% on Wednesday after an unexpected build in USA crude stockpiles and on fears of slowing demand, but halved their losses in post-settlement trade on talk that Saudi Arabia was mulling options to halt crude's descent, alongside other producers. Deputy Oil Minister Amir Hossein Zamaninia said in early May that Iran has mobilized all its resources to sell oil in a "grey market", to circumvent illegitimate USA sanctions against the country.
"It's not a huge move.What we're looking at is steady, reflecting concerns among traders whether or not the trade dispute development is fully priced in", said Michael McCarthy, chief market strategist at CMC Markets.
Financial markets across the globe were hammered over the past week after U.S. President Donald Trump on August 1 threatened to impose 10% tariffs on another $300 billion in goods from China starting next month. Yesterday, the EIA in its monthly report announced that it lowered the forecast for 2019 global demand growth by 70,000 barrels per day to 1 million barrels per day. As of Wednesday afternoon, West Texas Intermediate Crude was trading at $51.17 per barrel - down more than 4.5 percent, while Brent Crude was trading around $56.35 per barrel.
"While some Saudi overtures of additional output restraint, a softening USA dollar and lift in global risk appetite are facilitating today's rally, we are not viewing this as the beginning of a sustainable advance by any measure".