Oil dips as markets remain cautious on trade concerns

Oil prices dipped on Monday as sentiment remained cautious after a plunge in financial markets last week triggered worries that global growth may be slowing.

Front-month Brent crude oil futures were at $77.17 a barrel at 15:20, 6 cents below their last close.

US West Texas Intermediate crude futures were at $67.59 a barrel, flat from their last settlement.

Sentiment among investors remained cautious after hefty losses last week.

“Cooling economic conditions and symptoms of softer international trade have exacerbated bearish conditions as (the) growth outlook dims,” said Benjamin Lu of brokerage Phillip Futures in Singapore.

Singapore-based ship tanker brokerage Eastport said stock prices were falling amid policy uncertainty, rising interest rates and disappointing earnings from some companies.

Financial market turmoil may “weigh on investment and consumer spending, reducing trade flows and ultimately hitting demand,” it said.

Hedge funds slashed their bullish wagers on US crude in the latest week to the lowest level in more than a year.

The speculator group cut its combined futures and options position in New York and London by 42,644 contracts to 216,733 within the week leading up to October 23, the lowest level since September 2017.

There were also signs of a slowdown in global trade, with rates for dry-bulk and container ships – which carry most raw materials and manufactured goods – coming under pressure. On the supply side, however, oil markets remain tense ahead of the looming US sanctions against Iran’s crude exports, which are set to start next week and are expected to tighten supply, especially to Asia which takes most of Iran’s shipments.