Oil prices inched up in early Asian trading on Monday, with many investors focused on any fallout from the US imposition of tariffs on Chinese goods at the end of last week, which prompted immediate retaliation from China.
Global benchmark Brent was up 14 cents, or 0.2 per cent, at 77.25 a barrel by 0113 GMT. On Friday, the contract slipped 28 cents to settle at $77.11 a barrel.
US crude futures added 8 cents, or 0.1 per cent, to $73.88 after trading slightly lower earlier in the morning. They gained 86 cents, or 1.2 per cent, to settle at $73.80 a barrel on Friday.
Oil prices are likely to be weighed down by the trade conflict as investors are concerned about the impact of the tariffs and counter tariffs on global economic growth, analysts said.
“(Nonetheless) supply disruptions in Libya and Canada may put upward pressure on prices in the near-term,” ANZ said in a morning note, adding that recent data showed “an increase in the net-long positioning of hedge funds on Brent crude”.
The United States and China exchanged the first salvos in what could become a protracted trade war on Friday, slapping tariffs on $34 billion worth of each others’ goods and giving no sign of willingness to start talks aimed at a reaching a truce.
Supply disruptions are giving some support, with an outage at a major Canadian oil sands facility cutting regional supply. The stoppage at the 360,000 barrels per day (bpd) Syncrude facility in Canada has contributed to a sharp reduction in the discount for US crude versus Brent crude over the past month.
US producers are continuing to bring more rigs into oilfields already producing at record levels. The US rig count, an early indicator of future output, was up by five in the week to July 6, according to General Electric Co’s Baker Hughes energy services firm.
That brings the total count to 863, up 100 from last year.