Economists at the Organization of Petroleum Exporting Countries said Wednesday the global economy slows from an expected rate of 3.8 percent for gross domestic product in 2018 to 3.6 percent next year, but downplayed the risk for a trade war.
Turning to recent developments, Libya's National Oil Corporation (NOC) has lifted a force majeure on four major oil ports.
That potentially adds to disruptions in other oil producers amid tensions in the Middle East.
Due to higher US oil production, however, higher prices are not necessarily a net loss for the USA economy.
Futures in NY fell as much as 1.3 percent after the Trump administration unveiled a list of $200 billion in Chinese goods that could face 10-percent tariffs after public consultations end on August 30. Still, there is concern that doing so will use up global spare capacity and leave markets vulnerable to further or unexpected production declines.
Oil prices suffered steep falls on Wednesday after Libya said it would boost supply, even as investors fear that trade tensions will hit demand.
Money managers raised their bullish bets on US crude in the week to July 3, the US Commodity Futures Trading Commission said on Monday. At the heart of the problem for buyers is a USA threat to cut off access to the American banking system for foreign financial institutions that settle trades with the Middle East nation's central bank.
Funds' net long position in WTI has surged by 116 million barrels in the two most recent weeks, while net length in Brent has been unchanged.
"That basically took the wind out of the sails from the market", said Phil Flynn, analyst at Price Futures Group in Chicago. Close American allies such as South Korea and Japan are grappling with how to sustain their ties with the United States without jeopardising their energy industry as well as their relationship with long-time crude supplier Iran. The global benchmark traded at a premium of $5.55 to WTI for the same month.
Benchmark Brent crude oil rose $1.37, or nearly 1.9 percent, to a high of $74.77 a barrel before easing back to trade around $74.50 by 0820 GMT.
"You've got United States competition coming left, right, center and landing cheaper".
EIA, in its report on Tuesday, estimated that USA crude oil production averaged 10.9 million barrels per day in June, up 0.1 million barrels per day from the May level.
Thailand's PTT has recently made a rare purchase of light sweet US Bakken crude for delivery in late Q3.
The reopening allows the return of as much as 850,000 barrels per day of crude into worldwide markets, while an escalating U.S.