The oil price is finding it difficult to find direction as the market focuses on two scenarios that are currently playing out which is keeping a lid and floor on prices.

The trade wars between China and the US are starting to take a toll on the world economy and with no solution in sight, analysts are concerned that this issue may reduce the demand for oil as countries suffer from the fallout.

"The weaker global economic outlook is keeping oil prices under downward pressure, but tensions in the Middle East are enhancing awareness to possible supply risk and should keep a floor under oil in the medium term," said Stephen Innes, managing partner at Vanguard Markets in Bangkok.

Tensions between Iran and the US are also reaching boiling point and the threat of war is growing by the day and was exasperated last week when the British army seized an Iranian oil tanker on its was to deliver oil to Syria which was in breach of Sanctions currently in place.

This follows on from the US drone that was shot down by the Iranian military which nearly sparked the start of a conflict which was called off at the last moment by US President Donald Trump.

“Worries about what is going on in the Persian Gulf continue to put a bit of a bid into the market, but without any new significant developments the market dropped back toward unchanged,” said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut.

“Worries about demand growth are holding the market back.” He added.