Concerns about a slowdown in economic growth due to the trade war raging between the United States and China, the world’s biggest oil consumers, along with the potential hit to oil demand, are keeping prices in check. “Trade tensions (are) hanging like a dark cloud threatening to rain over oil prices,” said Jeffrey Halley, senior market analyst at OANDA. China’s commerce ministry said on Thursday China and the United States were discussing the next round of face-to-face trade talks scheduled for September, but hopes for progress hinged on whether Washington could create favorable conditions. San Francisco Federal Reserve President Mary Daly said she is in a “watch and see” mode as she assesses the need for another U.S. interest-rate cut for an economy that has “strong” momentum but faces headwinds from uncertainty and a global slowdown.

Concerns about the global economy have watered down the impact of oil production cuts that the Organization of the Petroleum Exporting Countries, Russia and other producers have been exercising over the past 2-1/2 years. When they (OPEC and its allies) really managed to accelerate the price from late 2016 onwards they had a big tailwind of global growth acceleration, now they have this big negative headwind of global growth de-acceleration,” said Bjarne Schieldrop, chief commodities analyst at Nordic bank SEB.

Morgan Stanley has lowered its oil price forecasts for the rest of the year, citing a weaker economic outlook, faltering demand and higher shale oil output.