Oil prices plunge on new trade war fears

US producer prices climb more than expected in June

Crude prices extended their slide on Thursday, with Brent clocking its worst day in more than 3 years, as a fresh escalation in US-China trade relations further clouded the outlook for global economic growth and oil demand.

Brent crude, the global oil benchmark, fell as much as 7.90 per cent to $60.02 a barrel — its lowest since June 14. It settled 7.2 per cent lower at $60.50 a barrel for its biggest one-day drop since February 2016.

Meanwhile, West Texas Intermediate, the US crude marker, slid as much as 8.5 per cent to $53.59 a barrel. It settled 7.9 per cent or $4.63 a barrel lower for its biggest one-day drop since February 2015.

Oil was already lower this morning after the Federal Reserve said on Wednesday its latest rate cut did not mark the start of a full-blown easing cycle. But the sell-off picked up sharply after President Donald Trump said he would implement a 10 per cent tariff on $300bn of additional Chinese goods, ending the brief ceasefire in the trade war.

Uncertainty about the trade war has weighed on global economic growth and business’ capital spending plans.

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