October 18, 2018 / 7:11 AM / a year ago

UPDATE 9-Oil falls on concerns over escalating trade row

 (Updates prices, market activity)
    By Collin Eaton
    HOUSTON, Oct 18 (Reuters) - Oil prices fell on Thursday as
investors' concerns returned to the impact an escalating trade
row between China and the United States will have on oil demand
growth and data showing ample supplies.
    Global benchmark Brent crude has fallen almost $8 per barrel
since reaching a four-year high of $86.74 on Oct. 3, weakened by
lower forecasts for global economic growth as the United States
and China impose tariffs on billions of dollars of each others'
goods. 
    Brent crude         settled at $79.29 per barrel, down 76
cents. U.S. crude        was down $1.10, or 1.6 percent, at
$68.65. 
    "The real driver of this correction is concerns surrounding
demand growth and trade issues," said Gene McGillian, vice
president of market research for Tradition Energy in Stamford,
Connecticut. "The world has backed off its highs." 
    On Oct. 9 the International Monetary Fund cut its global
economic growth forecasts for 2018 and 2019, partly due to the
toll trade policy tensions and the imposition of import tariffs
were taking on commerce. It predicted 3.7 percent global growth
in both 2018 and 2019, down from its July forecast of 3.9
percent growth for both years.             
    Earlier, Brent fell below $79 per barrel the day after a
U.S. Energy Department report showed oil producers had put 22
million barrels in storage tanks over the past four weeks.
    U.S. refineries entering maintenance season, in which major
plants go offline for four to six weeks, has also weighed on
crude demand and prices. 
    "You've got supplies where they are and you're in the time
of year when you have refining turnarounds," said Mike
O'Donnell, senior market strategist at RJO Futures in Chicago. 
    Investors also turned their attention to the impending loss
of Iran's crude exports after the United States re-imposes
sanctions in early November.
    Saudi Arabia said this month it would ramp up production by
300,000 barrels per day to help offset a sharp reduction of
Iran's crude exports next month. 
    But investors remained skeptical any country has enough
spare capacity to make up for loss of crude from Iran, one of
the Organization of the Petroleum Exporting Countries' largest
producers, analysts said.

    
 (Additional reporting by Alex Lawler and Osamu Tsukimori;
Editing by David Gregorio)
  
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