Oil on track for weekly loss although tanker attacks push up prices

London

OIL prices steadied on Friday but remained on track for a weekly loss on fears that trade disputes will dent global oil demand, though attacks on two oil tankers in the Gulf of Oman this week gave prices a floor.

Brent crude futures were up nine US cents at US$61.40 a barrel by 11:39 GMT, having gained 2.2 per cent on Thursday.

US West Texas Intermediate (WTI) crude futures were down 13 US cents at US$52.15. WTI also rose 2.2 per cent in the previous session. Both contracts were on course to register weekly declines of about 3 per cent.

The International Energy Agency (IEA) cut its demand growth forecast for 2019 by 100,000 barrels per day (bpd) to 1.2 million bpd, citing worsening prospects for world trade. However, the Paris-based agency said that it expects demand growth to climb to 1.4 million bpd for 2020.

On Thursday, the Organization of the Petroleum Exporting Countries (Opec) cut its 2019 forecast for growth in global oil demand even lower than the IEA, to 1.14 million bpd.

The attacks on oil tankers near Iran and the Strait of Hormuz pushed up oil prices by as much as 4.5 per cent on Thursday.

It was the second time in a month that tankers have been attacked in the world's most important zone for oil supplies, amid rising tensions between the United States and Iran. Washington quickly blamed Iran for Thursday's attacks, but Teheran denied the allegation.

"(The) attacks on the Japanese and Norwegian tankers in the Gulf of Oman underscore the severity of the security risks stemming from the Iran crisis and the difficulty of achieving a diplomatic off-ramp as long as the crippling US sanctions remain in place," RBC bank said.

Tensions in the Middle East have escalated since US President Donald Trump withdrew from a 2015 multinational nuclear pact with Iran and re-imposed sanctions, especially targeting Teheran's oil exports. Iran, which has distanced itself from the previous attacks, has said that it will not be cowed by what it calls psychological warfare. US Secretary of State Mike Pompeo said that the United States has assessed that Iran was behind the attacks on Thursday.

The US military later released a video that it said showed Iran's Revolutionary Guard removing an unexploded mine from the side of a Japanese-owned oil tanker.

In a statement, the Iranian mission to the United Nations said that Teheran "categorically rejects the US unfounded claim with regard to the June 13 oil tanker incidents and condemns it in the strongest possible terms". REUTERS