July 18 (UPI) -- Simmering trade tensions and an increase in U.S. crude oil inventories helped send the price of oil lower before the start of trading Wednesday in New York.
A survey of analysts from commodity pricing group S&P Global Platts revealed expectations of a decline in commercial crude oil inventories in the world's largest economy of 3 million barrels. If the U.S. Energy Information Administration confirms those expectations at around 10:30 a.m. EDT, it would put U.S. stockpiles about 4 percent below the five-year average and mark the sixth drop in a row.
That would be bullish for the price of oil. After the close of trading on Tuesday, however, the American Petroleum Institute reported U.S. crude oil inventories climbed 629,000 barrels last year. In a potential sign of slumping consumer demand, gasoline levels increased 425,000 barrels.
The price for Brent crude oil, the global benchmark, was down 1 percent as of 9:16 a.m. EDT to $71.44 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was down 0.73 percent to $66.67 per barrel.
Crude oil prices were supported midway through the trading day on Tuesday when the Libyan National Oil Corp. said it suspended exports from its Sharara oil field because of security issues. Production is limited to 125,000 barrels of oil per day at the field, enough for refinery requirements, but not enough to export.
Global trade issues, meanwhile, continue to raise economic concerns. Testifying before the U.S. Senate on Tuesday, U.S. Federal Reserve Chairman Jerome Powell struck an upbeat tone for forward momentum in the United States, but warned that if trade disputes escalate, it would have negative domestic and global consequences.
Writing on Wednesday, Christine Lagarde, the managing director of the International Monetary Fund said trade tensions have already left a mark.
"In April, the IMF warned against the self-inflicted economic wounds that result from protectionist measures," she wrote. "Unfortunately, the rhetoric has morphed into reality."
Europe's trade commissioner, Cecilia Malmström, said Wednesday she was taking steps to safeguard industries from the flood of steel moving into the market because of U.S. tariffs.
Markets may react later in the day when the EIA releases its inventory report. Ministers from a joint committee monitoring a production agreement from the Organization of Petroleum Exporting Countries may release a statement as well.