Oil steadied after another sharp pullback as traders remained wary over whether supplies will be sufficient to cover a range of global disruptions.
Futures in New York traded near $68 a barrel, having tumbled 4.2 percent as Libya restored output at some fields and the US signalled it may take a slightly softer approach with sanctions on Iranian exports. Iraq is shipping the most crude since 2016 and the US is considering tapping emergency reserves. Still, with American inventories forecast to have dropped further from the lowest level since 2015, traders remain on edge.
“Given the uncertain and unpredictable political and economic backdrop, it is as easy to make a bearish case for oil as a bullish one,” said Tamas Varga, an analyst at PVM Oil Associates Ltd in London.
Oil has tumbled more than 8 percent from a 2014 high reached earlier this year on concern that an escalating trade spat between the US and China will crimp global economic growth and reduce
Prices are also retreating as America and Saudi Arabia signal plans to keep markets well supplied while the US begins sanctions against Iran after President Donald Trump quit
a nuclear accord with the Islamic Republic.
West Texas Intermediate crude for August delivery traded at $68.05 a barrel on the New York Mercantile Exchange at 8:31 am local time, after decreasing $2.95 to $68.06 on Monday. Total volume traded was about 16 percent below the 100-day average.
Brent for September settlement rose 11 cents to $71.95 a barrel on the London-based ICE Futures Europe Exchange, following a $3.49 drop. The global benchmark crude tra-ded at a $4.83 premium to WTI for the same month.