Oil prices dipped on Wednesday after China reported relatively weak import data, although the market remained well supported by falling U.S. crude inventories and the introduction of sanctions against Iran.
Front-month Brent crude oil futures (LCOc1) were at $74.50 per barrel at 0651 GMT, down 15 cents, or 0.2 percent, from their last close.
China’s July crude oil imports recovered slightly in July after falling for the previous two months, but were still among the lowest this year due to a drop-off in demand from the country’s smaller independent, or “teapot”, refineries.
Shipments into the world’s biggest importer of crude came in at 36.02 million tonnes last month, or 8.48 million bpd, up from 8.18 million bpd a year ago, and just up on June’s 8.36 million bpd, data from the General Administration of Customs showed.
However, July imports were still the third-lowest so far this year.
Singapore-based brokerage Phillip Futures said on Wednesday that an escalating trade dispute between the United States and China has “unnerved investors on the prospect of lowered global oil demand growth.”
Markets were still supported by the introduction of new U.S. sanctions against Iran on Tuesday, which initially target Iran’s purchases of U.S. dollars – in which oil is traded – metals trading, coal, industrial software and its auto sector.
From November, Washington will also target Iran’s petroleum sector.
Iran is the third-largest producer among the members of the Organization of the Petroleum Exporting Countries (OPEC). It shipped out almost 3 million barrels per day (bpd) of crude in September, equivalent to around 3 percent of global demand.
Beyond the sanctions, the oil market was focusing on the U.S. market, where the American Petroleum Institute said on Tuesday that crude inventories fell by 6 million barrels in the week to Aug. 3 to 407.2 million.
Official U.S. fuel storage data is due to be released later on Wednesday by the Energy Information Administration (EIA).
In terms of production, the EIA on Tuesday slightly cut its 2018 expectation for average 2018 U.S. crude output to 10.69 million bpd, down from its previous estimate of 10.79 million bpd.