2019.05.0915:18:00UTC+00Oil Futures Settle Lower As Trade Worries Weigh

Crude oil prices edged lower on Thursday amid concerns over a likely drop in energy demand in the event of the U.S. and China failing to reach a trade agreement.

The U.S. has stated that it would impose additional tariffs on Chinese goods beginning on Friday and this prompted Beijing to threaten retaliation.

U.S. President Donald Trump claimed during a rally in Florida on Wednesday that the U.S. is planning to raise tariffs on Chinese goods because China "broke the deal."

"So they're flying in, the vice premier tomorrow is flying in - good man - but they broke the deal," Trump told his supporters. "They can't do that, so they'll be paying."

The Chinese Vice Premier Liu He is set to take part in the latest round of trade talks as officials from the two nations attempt to reach an historic trade agreement.

West Texas Intermediate Crude futures for June settled at $61.71 a barrel, down $0.42 from previous close.

Brent crude oil futures for June edged up slightly to $70.41 a barrel by mid afternoon.

On Wednesday, crude oil futures for June ended up $0.72, or 1.2%, at $62.12 a barrel after data from U.S. Energy Information Administration (EIA) showed an unexpected 4 million barrels drop in crude stockpiles in the week to May 3. Markets had expected inventories to increase by 1.2 million barrels.

A survey from S&P Global Platts released on Thursday showed that OPEC's collective production held steady in April. The report said output rose by 30,000 barrels per day to 30.26 million bpd.

The survey showed Saudi Arabia's production dropped to a 15-month low, while Iran's output fell to levels that were even lower than at previous times when it was under U.S. sanctions.

Despite large increases in output from Iraq and Nigeria, compliance with the output restraint agreement was 116% for the 11 members with quotas, the survey showed.