The oil price is broadly steady Friday morning, as investors consider a number of key geo-political details. Chief among them are incoming US sanctions on Iranian oil exports and the ongoing uncertainty surrounding the trade disagreements between the US and China.
Both developments mean very different things for the price of the valuable commodity.
By 0745 BST, the price of Brent Crude oil was 0.14% lower at $77.96 per barrel. The price of US WTI crude oil, meanwhile, was 0.01% in the red at 70.24 per barrel.
Incoming Iran oil sanctions
The November date for the imposition of US sanctions, which will basically halt Iran’s oil export activities, is moving closer. When the sanctions are in place, it will essentially mean a reduction in the amount of oil available on for those many countries who import it.
And that’s something that is helping to keep the oil price supported and even push it higher. Indeed, oil prices have rallied around 10% in the past two weeks, largely on this detail – with a few US inventory wobbles thrown in.
After that period of rising oil prices, its not clear if there’s much momentum left from the incoming sanctions. However, what is certain is that even if that piece of news doesn’t lift oil much further, the price of the black stuff is unlikely to fall far ahead of the sanctions date.
US-China trade disagreement
Meanwhile, the ongoing trade disagreement between the US and China is continuing. With the two major economies still not ready – or able – to find common ground on such an important topic, investors are uncertain as to how far things could spiral. One particular worry is the potential for a global trade war.
However, as these trade tensions and news Thursday that factory output in China likely slowed in August continue, there are fears that China’s demand for oil may not be quite as strong as is currently expected.
Add to that the loss of risk appetite amid such a serious disagreement and it’s easy to see how the trade tensions and associated potential outlooks are weighing on the oil price and limiting its rise.