Oil prices fell on Wednesday after China said it would impose tariffs on a number of U.S. goods including agricultural products, raising the prospect of a growing trade war that could impact global growth.
China, the world’s largest importer of raw materials, hit back at the Trump administration’s plan to levy tariffs on $50 billion of its goods, retaliating with a list of duties on U.S. imports including soybeans, planes, cars, whiskey and chemicals.
Equity and commodity markets dropped sharply, reflecting growing nervousness among traders and investors.
Brent crude futures fell $1.23 on the day to $66.89 a barrel by 0918 GMT, bringing losses for the week so far to nearly 5 percent.
U.S. WTI crude futures were last down $1.18 at $62.33 a barrel.
Oil prices had already been under pressure earlier in the day ahead of a possible rise in U.S. inventories, as reported by the Energy Information Administration (EIA) later on Wednesday.
“We’re seeing the reaction across the board … crude oil is keeping an eye on stocks and with S&P (futures) down … we’re seeing renewed weakness ahead of the EIA this afternoon,” Saxo Bank head of commodities strategy Ole Hansen said.
Yet fund managers hold more bets on a sustained rise in the price of Brent crude oil than at any time, data from the InterContinental Exchange shows.
Source: Reuters
