Crude wavers as China plans tariffs to counter Trump
NEW YORK (Bloomberg) -- Crude fluctuated as intensifying tariff threats between the U.S. and China raised demand concerns.
Futures slipped as much as 0.6% on Friday and are little changed on the week. An escalating trade war between Beijing and Washington have investors worried about a slowdown in economic activity and oil consumption. China plans to levy tariffs on about $60 billion of U.S. goods, which would go into effect as soon as the U.S. enacts its own measures. Crude oil wasn’t included in the list of products potentially affected.
“Commodities take the trade wars the hardest,” said John Kilduff, a partner at New York-based hedge fund Again Capital “As this trade war escalates, WTI could really be hit as a result.”
After last month’s decline, crude is off to a rocky start in August amid a trade spat between the U.S. and China. Duties ranging from 5% to 25% will be levied on 5,207 kinds of American imports if the U.S. delivers its proposed taxes on another $200 billion of Chinese goods, China’s Ministry of Finance said in a statement on its website late Friday.
The country’s largest refiner, Sinopec, will hold off buying U.S. crude as tariff threats raise the prospect of more expensive American imports, according to a person familiar with the matter.
“The current trade war between the U.S. and China continues to take headlines and cause uncertainty,” said Michael Poulsen, an analyst at Global Risk Management Ltd.
West Texas Intermediate crude for September delivery slid $0.25 to $68.71/bbl on the New York Mercantile Exchange. Total volume traded Friday was about 31% below the 100-day average.
Brent for October settlement added $0.02 to $73.47/bbl on the London-based ICE Futures Europe exchange. Prices are 1.1% lower this week. The global benchmark traded at a $5.99 premium to WTI for the same month.
Beijing plans to impose an additional 5% in tariffs on about 600 kinds of products including planes and computers, another 10% on almost 1,000 products including wigs and textiles, an extra 20% on more than 1,000 items including some chemicals, cookers and paper, and an additional 25% on over 2,400 products such as meat, wheat, wine and LNG, according to the statement.
Oil Market News
Gasoline futures added 0.9% to $2.0863/gallon. The U.S. has been unable to persuade China to cut Iranian oil imports, according to two officials familiar with the negotiations.
