Oil prices tanked to multi-week lows early on Tuesday, the first full trading day after the new U.S. and Chinese tariffs and counter-tariffs entered into force and as signs emerged that both OPEC and its key partner in the production cut deal, Russia, boosted oil production in August.
As of 11:06 a.m. EDT on Tuesday, WTI Crude was down 3.23 percent at $53.23 and Brent Crude had fallen below $58 a barrel-to $57.59, down by 1.82 percent on the day.
Market participants were again concerned about the repercussions of the U.S.-China trade war on global economies and oil demand growth. On Sunday, September 1, the U.S. imposed tariffs on Chinese goods, and China imposed tariffs on some U.S. goods, although Beijing left most of the tariffs for the December round of new tariffs.
On the demand side, the market is worried about slowing economies and, by extension, slowing oil demand growth. On the supply side, too, bearish factors abound.
According to a Reuters survey, OPEC's crude oil production increased in August, thanks to Iraq and Nigeria. OPEC's August production has been estimated at 29.61 million barrels per day, which is 80,000 barrels per day over July's production level. Even though Saudi Arabia is still over-complying with its share of the cuts, it lifted production in August to produce 9.63 million barrels per day.
In Russia, OPEC's key partner in the OPEC+ coalition curbing output to support oil prices, oil production increased to 11.29 million bpd in August, up from 11.15 million bpd in July, and exceeding Russia's cap under the deal. Rosneft boosted its oil production by 5 percent last month compared to the previous month, according to Russia's energy ministry data cited by Reuters.
Yet, Russian Energy Minister Alexander Novak affirmed that Russia was still looking to comply in full with its share of the cuts.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More