Oil prices edge up but U.S.-China trade war drags

By Koustav Samanta
SINGAPORE, Aug 6 (Reuters) - Oil prices edged up on Tuesday,
but remained under pressure as the escalating U.S.-China trade
war stoked concerns over global economic growth and future
demand for crude.
Brent crude futures LCOc1 had risen 10 cents, or 0.17%,
to $59.91 a barrel by 0149 GMT after earlier dipping to their
lowest since mid-January at $59.07.
The international benchmark fell more than 3% on Monday as
traders worried the ongoing trade tensions between the world's
two biggest oil buyers would dent appetite for fuel.
West Texas Intermediate (WTI) crude CLc1 futures rose 7
cents, or 0.13%, to $54.76 per barrel.
A yearlong U.S.-China trade war boiled over as Washington
accused Beijing of manipulating its currency after China let the
yuan drop to its lowest point in more than a decade.
"Oil prices can't shake off falling demand concerns, as
China's latest escalation with devaluing the yuan and limiting
U.S. agricultural purchases derail hopes for a trade deal to be
reached this year," said Edward Moya, senior market analyst at
OANDA in New York.
"Right now markets are ignoring the Middle East situation,
but if we see the situation in the Persian Gulf remain volatile
and if U.S. inventories extend their streak of declines, oil
should see some support here," Moya added.
Iran will no longer tolerate "maritime offences" in the
Strait of Hormuz, its foreign minister said on Monday, a day
after it seized a second oil tanker near the strategic waterway
that it accused of smuggling fuel. Iran's seizure of the Iraqi oil tanker had raised some
concerns about potential Middle East supply disruptions in the
Gulf. Concerns that the trade conflict has entered a phase of
retaliatory action was weighing down on the sentiments in the
oil market, which at the moment is taking lesser notice of the
Middle East tensions, analysts said.
Oil prices might get some respite later in the day as a
preliminary Reuters poll showed U.S. crude oil inventories were
expected to be down for an eighth consecutive week.
The poll was conducted ahead of reports from the American
Petroleum Institute (API), an industry group, which is scheduled
to release its data for the latest week at 4:30 p.m. EDT (2030
GMT) on Tuesday.