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Benchmark Brent crude oil was down 65 cents a barrel at $79.09
by 1000 GMT. U.S. light crude fell $1.15 to a low of $69.22 a
barrel and was last at $69.35, down $1.02.
The International Energy Agency said on Thursday that although
the oil market was tightening at the moment and world oil demand
would soon reach 100 million barrels per day (bpd), global
economic risks were mounting.
"Things are tightening up," the agency said in its monthly
report, but added: "As we move into 2019, a possible risk to our
forecast lies in some key emerging economies, partly due to
currency depreciations versus the U.S. dollar raising the cost
of imported energy."
"In addition, there is a risk to growth from an escalation of
trade disputes," the Paris-based agency said.
U.S. companies in China are being hurt by tariffs in the growing
trade war between Washington and Beijing, according to a survey,
prompting U.S. business lobbies to urge U.S. President Donald
Trump's administration to reconsider its approach.
The White House has invited Chinese officials to restart trade
talks just as it prepares to escalate a trade war with China
with tariffs on $200 billion worth of Chinese goods.
Short-term, the outlook is for tighter supply.
Brent rose above $80 per barrel on Wednesday for the first time
since May, spurred by expectations that U.S. sanctions against
Iran's oil exports, which will start in November, will tighten
global markets.
U.S. light crude pushed over $70 due to falling U.S. crude
inventories and production levels.
The IEA said tightening supply was putting increasing pressure
on prices. "The price range for Brent of $70-$80 per barrel in
place since April could be tested," it said.
U.S. crude stocks fell 5.3 million barrels in the week to Sept.
7 to 396.2 million barrels, the lowest since February 2015 and
about 3 percent below the five-year average for this time of
year, the U.S. Energy Information Administration (EIA) said on
Wednesday.
Stephen Innes, head of trading for Asia-Pacific at futures
brokerage Oanda in Singapore, said the inventory data showed "a
much deeper drop than analysts' expectations".
U.S. crude oil production fell by 100,000 bpd to 10.9 million
bpd as the industry faces pipeline capacity constraints.
(Reporting by Henning Gloystein; editing by Christian
Schmollinger, Jason Neely and Jan Harvey)
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