Trump’s Trade War Triggers Oil Prices Fall
This was more or less foreseen, a trade war between two of the world’s largest economics wouldn’t be without some negative consequences.
The first to cough is the ever-volatile crude oil prices.
The price of the commodity took a hit after U.S. President Donald Trump last week pushed ahead with hefty tariffs on $50 billion of Chinese imports, starting on July 6.
Because of China’s tariff on oil, U.S. West Texas Intermediate crude futures touched their lowest level since April, falling to $63.59 per barrel before edging back to $63.83 a barrel by Monday morning.
That was still down $1.23, or 1.9%, from their last settlement.
International oil prices also fell, with Brent crude futures down 76 cents, or 1.1%, at $72.67 per barrel.
“Crude oil prices crashed as U.S.-China trade tensions escalated last Friday,” wrote Benjamin Lu of Singapore-based futures brokerage, Phillip Futures, according to Reuters reports.
“Beijing has retaliated … with its position as a top importer from the U.S.,” Lu said.
“These punitive measures on bilateral trade have unnerved investors as it hurts global economic growth.”
Trump’s decision to hit China with 25% levies was met with an immediate retaliation, moving the two closer to a trade war that could potentially batter the global economy.
China also slammed tariffs on oil imports, as part of retaliation to President Donald Trump’s tariffs.
The announcement of the tariffs came despite weeks of talks between the two sides.
Besides the effect of the trade war, oil prices also plunged after taking a battering last week as investors fret over Russia and Saudi Arabia’s expected move to increase output at an OPEC meeting that starts on Friday this week.
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