Oil prices drop as U.S.-China trade war fuels growth concerns

TOKYO, Aug 5 (Reuters) - Oil prices fell on Monday amid
concerns about weaker crude demand after U.S. President Donald
Trump said he would impose tariffs on more Chinese imports,
potentially ramping up a trade war between the world's two
largest economies.
Tensions in the Middle East offered some support to prices,
with Iran seizing a tanker that it said was smuggling fuel.
Brent crude LCOc1 was down 50 cents, or 0.8%, at $61.39 a
barrel by 0029 GMT.
U.S. crude CLc1 was down 24 cents, or 0.4%, at $55.42 a
barrel.
Both of the benchmarks fell last week, with Brent dropping
more than 2% and U.S. crude ending the week around 1% lower.
"Oil demand has disappointed ... in 2019 due to weaker
economic activities, unfavourable weather and trade tensions,"
Goldman Sachs said in a research report.
Trump last week he would impose a 10% tariff on $300 billion
of Chinese imports and said he could raise duties further if
China's president, Xi Jinping, failed to move more quickly
towards a trade deal.
The announcement extends U.S. tariffs to nearly all imported
Chinese products. China on Friday vowed to fight back against
Trump's decision, a move that ended a month-long trade truce.
The trade war has been hitting economic growth, which tends
to reduce demand for commodities such as oil.
U.S. crude oil exports surged by 260,000 barrels per day
(bpd) in June to a monthly record of 3.16 million bpd,
suggesting there is plenty of oil in the market. South Korea
bought record volumes and China resumed purchases, data from the
U.S. Census Bureau showed. Also in the U.S., the weekly oil rig count, an indicator of
future production, fell for a fifth week in a row as most
independent producers cut spending even though majors were still
pushing ahead with investments in new drilling. RIG/U
In the Middle East, Iranian Revolutionary Guards seized an
Iraqi oil tanker in the Gulf, which they said was smuggling
fuel, Iran's state media reported on Sunday, in a show of power
amid heightened tensions with the West.