Oil slips near five-week low as trade angst counters supply risk

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Oil traded near a five-week low as concern over supply losses from Iran to Russia were offset by high American stockpiles and fears that if U.S.-China trade talks fail it could dent global demand.

Futures erased earlier gains to fall as much as 0.5 percent in New York after a 1.4 percent plunge on Tuesday.

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Russian tankers continue to hold Urals crude exported from the country’s Baltic Sea port of Ust-Luga, a sign that contamination issues remain unresolved. Meanwhile, U.S. crude stockpiles climbed by 2.81 million barrels

Petroleum Institute was said to report on Tuesday.

The oil market has been benign in its response to the threat of supply losses from Iran following the end of U.S. sanctions waivers on its exports. Prices were down even after the Islamic Republic’s threat to stop observing restrictions on uranium enrichment if Europe doesn’t abide by commitments on oil and banking.

Oil’s rally went into reverse late last month due to speculation that Saudi Arabia and other members of the Organization of Petroleum Exporting Countries would fill the gap created by the loss of Iranian barrels. Meanwhile, signals that the global economic outlook is improving had been preventing steeper declines, but that’s now been thrown into doubt by the White House’s plan to raise tariffs on Chinese imports. A delegation from Beijing is still set to visit Washington this week for talks.

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