Singapore — Crude oil futures were lower during mid-morning trade in Asia Wednesday amid macroeconomic growth concerns and ahead of the release of weekly US stocks data.
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At 10:30 am Singapore time (0230 GMT), July ICE Brent crude futures were down 28 cents/b (0.4%) from Tuesday's settle at $69.83/b, while the NYMEX July light sweet crude contract was 40 cents/b (0.68%) lower at $58.74/b.
"Crude is sliding this morning under the influence, once again, of economic growth worries due to the escalating US-China trade tensions," said Vandana Hari, founder Vanda Insights.
"Financial markets continue to hang on to hope that US and China will return to the negotiating table, while pragmatism is dictating that they start pricing in the chances of the trade war lingering for the rest of this year. So, you see the stock markets heaving up and down, dragging oil in their wake," she added.
US President Donald Trump earlier this week said the US was not ready to reach a trade deal with China.
"Asia markets had largely commenced the session in red this morning -- no surprise given the onslaught of worries setting in with regards to growth," said IG market strategist Pan Jingyi.
Speaking during a news conference in Japan on Monday, Trump also said it was possible to reach a nuclear deal with Iran and that he was not looking for regime change in the country.
"I really believe that Iran would like to make a deal and I think that's very smart of them, and I think that's a possibility to happen," he added.
Analysts said the comments helped remove some fear from the minds of investors, thereby edging crude prices lower.
"US President Trump pulled back on his recent aggressive tone against Iran, easing concerns of further declines in exports," ANZ analysts said in a note.
Elsewhere, US commercial crude stocks likely fell 1.4 million barrels for the week ended May 24, according to analysts surveyed Tuesday by S&P Global Platts.
An inventory draw this time of year is not unusual. Crude stocks typically decline heading into the summer as refiners increase runs.
For refined products, analysts polled by Platts were looking for US gasoline inventories to have fallen 800,000 barrels last week, and for distillate stocks to have fallen by 225,000 barrels.
Preliminary data is due for release by the American Petroleum Institute later Wednesday and more definitive numbers by the US Energy Information Administration later Thursday.
As of 0215 GMT, the US Dollar Index was down 0.02% at 97.825
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