Aug. 15 (UPI) -- Oil prices were moving in negative territory ahead of the start of U.S. trading on signs of slowing demand and lingering concerns about U.S.-Turkish relations.
After the close of trading on Tuesday, the American Petroleum Institute reported a 3.6 million barrel increase in U.S. crude oil inventories, a sharp contrast to the drain forecast in a survey from S&P Global Platts earlier in the week. A decline in U.S. retail gasoline prices helped draw on inventories, according to API figures, though distillates like diesel fuel offset the drain on gasoline.
Markets have been rattled as U.S. trade aggression expands to engulf Turkey, a NATO ally. Tensions escalated over the detention of U.S. pastor Andrew Brunson and sanctions related to his arrest, a U.S. move that devalued the Turkish lira.
The Turkish government said Wednesday it was doubling tariffs on American cars and other goods in a reciprocal response to U.S. President Donald Trump's plans to double tariffs on Turkish steel and aluminum. On Tuesday, Turkish President Recep Tayyip Erdogan called for a boycott of U.S. electronics.
Phil Flynn, a market analyst at the PRICE Futures Group in Chicago, said in a daily emailed market report a Turkish spat normally wouldn't upset the market, though compounding trade disputes and geopolitical tensions are unsettling.
"The fears surrounding Turkey are on fire this morning and it may take a political event to stop the fear" he said.
The price for Brent crude oil, the global benchmark, was down 0.88 percent as of 9:20 a.m. EDT to $71.82 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was down 1.1 percent to $66.31 per barrel.
The price of oil will react after 10:30 a.m. EDT when the U.S. Energy Information Administration issues its data on oil, gasoline and distillate inventories. If EIA figures are higher or lower than API's, the price of oil will move in kind.
Elsewhere, the U.S. Federal Reserve reported a downturn in total industrial production in July. Total factory production increased 0.3 percent from June, spurred on by automakers, though mining, utilities and construction posted declines.
Total industrial production increased 0.1 percent in July, after increasing about 0.5 percent on average over the last five months.