Oil prices fell on Tuesday as the ongoing U.S.-China trade war cast a pall over markets, with soft South Korean data adding to concerns over emerging markets and a rise in the Organisation of Petroleum Exporting Countries (OPEC) output.
U.S. crude CLc1 was down 26 cents, or 0.5 per cent, at $54.84 a barrel by 0644 GMT, while Brent LCOc1 was down 6 cents at $58.60 a barrel.
The U.S. this week imposed 15 per cent tariffs on a variety of Chinese goods and China began to impose new duties on a $75 billion target list, deepening the trade war that has rumbled on for more than a year.
U.S. President Donald Trump said both sides would still meet for talks later this month.
South Korea’s economy turned out to have expanded less than estimated during the second quarter as exports were revised down in the face of the prolonged U.S.-China trade dispute, central bank data showed on Tuesday.
A move on Sunday by Argentina to impose capital controls is also casting a spotlight on emerging market risks.
“Oil will struggle to make substantial headway topside this week with no progress on trade talks or meetings even, soft data from Asia and a possible cracking of OPEC’s resolve to control production,” said Jeffrey Halley, senior market analyst at OANDA.
Output from the OPEC rose in August for the first month this year as higher supply from Iraq and Nigeria outweighed restraint by top Saudi Arabia and losses caused by U.S. sanctions on Iran.
OPEC, Russia and other non-members, known as OPEC+, agreed in December to reduce supply by 1.2 million bpd from January 1, this year.
OPEC’s share of the cut is 800,000 bpd, to be delivered by 11 members and exempting Iran, Libya and Venezuela.