Photo: Liang Xu/Xinhua via AP.

INTERNATIONAL - Oil prices held steady on Friday as a fall in US crude inventories to the lowest levels since 2015 supported the market, although Sino-US trade tensions and economic weakness from emerging markets remained a concern.

US West Texas Intermediate (WTI) crude futures CLc1 were at $67.93 (R1036.26) per barrel at 06:54 GMT, up 16 cents from their last settlement.

International Brent crude futures LCOc1 were up 8 cents at $76.58 a barrel.

“Oil inventory data released last night showed a larger-than-expected draw in crude inventories,” said William O’Loughlin, investment analyst at Australia’s Rivkin Securities.

US commercial crude oil inventories fell by 4.3 million barrels to 401.49 million barrels C-STK-T-EIA in the week to Aug. 31, the lowest since February 2015, U.S. Energy Information Administration (EIA) data showed on Thursday.

Despite that, analysts said prices were curbed by a rise in refined product stocks and a relatively weak U.S. peak fuel consumption season this summer, known as the driving season.

Gasoline stocks USOILG=ECI rose by 1.8 million barrels, while distillate stockpiles USOILD=ECI, which include diesel and heating oil, climbed by 3.1 million barrels, the EIA data showed.

“U.S. gasoline inventories are now above the top of the 5-year range,” U.S. investment bank Jefferies said in a note on Friday.

“The U.S. summer driving season has proven to be a lacklustre one in terms of gasoline demand,” said O’Loughlin at Rivkin Securities.

Ongoing emerging market weakness, as well as potential new U.S. import tariffs on Chinese goods, were also weighing on oil market sentiment.

“Emerging markets, which tend to have a higher energy intensity of GDP, are an obvious concern,” said Jefferies.

Asian shares slipped to a 14-month trough on Friday as investors feared a new round of Sino-U.S. tariffs, while currencies from Indonesia to India also remained under pressure.

On the supply side, U.S. crude oil production C-OUT-T-EIA last week remained at a record 11 million barrels per day (bpd), a level it has largely been at since July.

After rising by almost a third in the last two years, Jefferies said: “US production growth will now significantly decelerate until 4Q19.”

Outside the US, sanctions against major oil producer Iran, which from November will target oil exports, are fuelling expectations of a tighter market toward year-end.

“The main driver of oil prices, in our view, remains the re-imposition of US ... sanctions against consumers of Iranian oil,” said Standard Chartered this week.

“There is still considerable uncertainty over the strategies of China and India, Iran’s main customers.”

Washington has indicated it may offer temporary sanction waivers to allied countries that are unable to immediately cease imports from Iran.

- REUTERS