Oil prices plunge on new trade war fears

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.