TOKYO (Reuters) - Oil prices edged down on Friday after three days of gains, but were still supported by Saudi Arabia's halt on transporting crude through a key shipping lane, falling U.S. inventories and easing trade tensions between Washington and Europe.
U.S. West Texas Intermediate
U.S. President Donald Trump and Jean-Claude Juncker, president of the European Commission, the EU's executive body, struck a surprise deal on Wednesday that ended the risk of an immediate trade war between the two powers.
A trade war would likely hit demand for commodities like oil, which is used heavily in shipping, construction and other economic activity.
Meanwhile, Saudi Arabia said it was "temporarily halting" oil shipments through the Red Sea shipping lane of Bab al-Mandeb after an attack by Yemen's Iran-aligned Houthi movement.
Any move to block the Bab al-Mandeb, which is between the coasts of Yemen and Africa at the southern end of the Red Sea, would virtually halt oil shipments through Egypt's Suez Canal and the SUMED crude pipeline that link the Red Sea and Mediterranean.
An estimated 4.8 million barrels per day of crude oil and refined products flowed through the Bab al-Mandeb strait in 2016 towards Europe, the United States and Asia, according to the U.S. Energy Information Administration.
However, Saudi Arabia has the Petroline, also known as the East-West Pipeline, which mainly transports crude from fields clustered in the east to Yanbu for export. That could offset a bottleneck caused by Bab al-Mandeb's closure.
(Reporting by Aaron Sheldrick; Editing by Joseph Radford)
This story has not been edited by Firstpost staff and is generated by auto-feed.
Firstpost is now on WhatsApp. For the latest analysis, commentary and news updates, sign up for our WhatsApp services. Just go to Firstpost.com/Whatsapp and hit the Subscribe button.
Updated Date: Jul 27, 2018 07:05:12 IST