SEOUL: Oil prices dipped on Wednesday as potential damage to the global economy and fuel demand from the intensifying Sino-U.S. trade dispute continued to cast a shadow over the market.

International benchmark Brent crude futures LCOc1 were at $58.75 a barrel by 0642 GMT, down 19 cents, or 0.32%, from their previous settlement and trading near seven-month lows.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were down 12 cents, or 0.22%, from their last close at $53.51 per barrel.

Brent prices have plunged more than 9% in the past week after U.S. President Donald Trump said he would slap a 10% tariff on a further $300 billion in Chinese imports starting on Sept. 1, sending global equity markets into a tailspin.

“Crude oil prices remained under pressure as investors grappled with the impact of the trade conflict,” ANZ bank said in a note.

But Trump on Tuesday dismissed fears the trade row with China could be drawn out.

“The most significant outcome of the ramp-up in tariff measures will be through increased economic and trade uncertainties, negatively impacting physical oil and gas demand and market sentiment,” Fitch Solutions said in a note.

Meanwhile, Saudi Arabia Energy Minister Khalid Al-Falih and U.S. Energy Secretary Rick Perry on Tuesday said both sides expressed concern over threats targeting freedom of maritime traffic in the Arabian Gulf as they met in Washington.

“There are concerns that an event could occur at any moment ... the risk might be shifting to the upside in the near-term for oil contracts,” said Michael McCarthy, chief market strategist at CMC Markets.

Tensions in the Middle East have heightened in the wake of attacks on tankers and U.S. drones, raising concerns over passing through the Straight of Hormuz, a key shipping artery of global oil trade.

Elsewhere, data indicating a larger-than-expected drop in U.S. crude stocks offered some support to oil prices.

U.S. crude inventories fell by 3.4 million barrels in the week ended Aug. 2 to 439.6 million barrels, compared with analyst expectations for a decrease of 2.8 million barrels.

Official data from the government’s Energy Information Administration (EIA) is due on Wednesday. —Reuters