HOUSTON - Oil prices fell on Thursday as investors' concerns returned to the impact an escalating trade row between China and the United States will have on oil demand growth and data showing ample supplies.
Global benchmark Brent crude has fallen almost $8 per barrel since reaching a four-year high of $86.74 on Oct. 3, weakened by lower forecasts for global economic growth as the United States and China impose tariffs on billions of dollars of each others' goods.
Brent crude settled at $79.29 per barrel, down 76 cents. U.S. crude was down $1.10, or 1.6 percent, at $68.65.
"The real driver of this correction is concerns surrounding demand growth and trade issues," said Gene McGillian, vice president of market research for Tradition Energy in Stamford, Connecticut. "The world has backed off its highs."
On Oct. 9 the International Monetary Fund cut its global economic growth forecasts for 2018 and 2019, partly due to the toll trade policy tensions and the imposition of import tariffs were taking on commerce. It predicted 3.7 percent global growth in both 2018 and 2019, down from its July forecast of 3.9 percent growth for both years.
Earlier, Brent fell below $79 per barrel the day after a U.S. Energy Department report showed oil producers had put 22 million barrels in storage tanks over the past four weeks.
U.S. refineries entering maintenance season, in which major plants go offline for four to six weeks, has also weighed on crude demand and prices.
"You've got supplies where they are and you're in the time of year when you have refining turnarounds," said Mike O'Donnell, senior market strategist at RJO Futures in Chicago.
Investors also turned their attention to the impending loss of Iran's crude exports after the United States re-imposes sanctions in early November.
Saudi Arabia said this month it would ramp up production by 300,000 barrels per day to help offset a sharp reduction of Iran's crude exports next month.
But investors remained sceptical any country has enough spare capacity to make up for loss of crude from Iran, one of the Organization of the Petroleum Exporting Countries' largest producers, analysts said.