Oil slides as China hits US with new tariffs
Brent crude tumbled below $59 as China announced new tariffs on US imports on Friday, the latest move in the escalation of a trade war that is knocking the outlook for global economic growth and oil demand.
The price of Brent crude, the international benchmark, was down 1.5 per cent at $59.00 a barrel, falling as low as $58.30. West Texas Intermediate, the US marker, was trading at just under $54 a barrel, 2.5 per cent lower than Thursday’s close, having fallen as low as $53.40 earlier in the day.
Beijing said that it would impose additional levies of between 5 and 10 per cent on $75bn of US imports from September, the latest retaliatory measure in the tit-for-tat trade war to darken the macroeconomic outlook and hit prospects for oil consumption growth.
It has been a volatile period for oil prices, which fell below $59 last week, before a slow recovery, as demand concerns outweigh worries about supply related to sanctions on Iran and Venezuela, storms in the Gulf of Mexico and potential further cuts by Opec.
Near the beginning of August, oil prices plummeted to a seven-month low with a double whammy of continuing trade tensions and fears of a supply glut after a surprise build up in US oil stockpile.
China and the US will meet for trade negotiations in September, with the oil industry hopeful of a resolution to improve the outlook for demand and push up prices.
Attention will also be paid to any clues on monetary policy to come out of the speech by US Federal Reserve chair Jay Powell later on Friday.