Mubasher: Oil futures traded lower for the second session in a row on Tuesday amid signs that a flaring trade conflict between the US and China was taking a heavy toll on global economic growth, Reuters reported.

This came despite losses were capped by heightened tension in the Middle East following last week’s oil carrier attacks.

By 8:38 am GMT, US Nymex crude futures ticked down by $51.92 per barrel (pb), having shed 1.7% in the prior session, while global benchmark Brent futures dropped by 0.46% to $60.66 pb, after falling by 1.1% by the settlement.

The Federal Reserve of New York on Monday said that US manufacturing business conditions have deteriorated this month, indicating the first contraction since more than two years.

US business morale worsened as trade tensions between the world’s two biggest economies escalated, and labour market seemed to soften.

Oil prices have dropped by nearly 20% since the highest levels recorded last April, partially due to worries over the US-Sino trade rows and disappointing economic figures, according to Reuters.

US President Donald Trump and his Chinese counterpart could meet on the sidelines of the Group of 20 (G20) summit in Osaka, Japan later this month.

Oil markets were also dragged down by forecasts of a record shale oil output next July, according to the US Energy Information Administration (EIA).

That said, tensions in the Middle East are set to keep price declines in check, analysts told Reuters.

The US deployed around 1,000 more troops to the Middle East for defensive purposes, against the backdrop of the Iranian threat, Acting US Defense Secretary Patrick Shanahan announced.

Worries over a confrontation between the US and Iran have been triggered since last Thursday after two crude carriers were attacked in the Gulf of Oman.

While Washington laid blame for the attack at the door of Iran, Tehran has distanced itself from the act.

In the same vein, markets are anticipating a meeting between the Organization of the Petroleum Exporting Countries (OPEC) and other producers, including Russia.

The so-called OPEC+ alliance is to decide whether to roll over output cuts through the rest of the year, after they expire this month.

The policy meeting is expected to be held in the week after the G20 summit, Saudi Arabian Energy Minister Khalid al-Falih said.

The Saudi minister emphasised the need for cooperation among countries to maintain shipping lanes open for the passage of oil and other supplies.