Oil prices fell about 2 percent on Friday after U.S. President Donald Trump threatened new tariffs on China, reigniting fears of a trade war between the world’s two largest economies that could hurt global growth. As Reuters writes in an article "Oil falls on Trump's latest China trade threats", Trump said on Thursday he had ordered U.S. trade officials to consider tariffs on an extra $100 billion of imports from China, escalating tensions with Beijing.
Brent crude LCOc1 futures settled down $1.22 at $67.11 a barrel. U.S. West Texas Intermediate (WTI) crude CLc1 futures fell $1.48 to $62.06 a barrel, a 2.3 percent loss. Brent crude dropped 2.8 percent in the week while U.S. crude fell 4.4 percent, the biggest weekly decline since early February.
U.S. stock indexes also fell on trade war jitters, which weighed on oil prices. Crude futures have recently tracked with equities.
Some market participants are still optimistic on the oil sector.
“We’re cautiously bullish here,” said Dan Hussey, a market strategist at RJO Futures in Chicago. “It’s the fundamentals.”
U.S. crude inventories unexpectedly fell last week, data showed on Wednesday.
Russian Energy Minister Alexander Novak said that an arrangement under which Moscow cooperates with the OPEC oil group could become indefinite once a current deal to curb oil production expires at the end of the year.
The Organization of the Petroleum Exporting Countries and other large oil producers led by Russia have agreed to curtail their combined output by around 1.8 million barrels per day until the end of 2018 to smooth out bloated oil inventories. OPEC and its allies should keep the cuts to ensure healthy price levels as a way to boost investment in the industry and avoid a supply and price shock in the long run, Qatar’s energy minister said.
