Crude slid as a trade spat between the US and China overshadowed concerns over global supply disruptions.
Futures in New York fell as much as 1.8%. Just as the US and China prepare for talks in Washington, President Donald Trump said that China’s leaders “broke the deal" he was negotiating with them on trade. Beijing has warned it will retaliate if he follows through on a plan to raise tariffs. Meanwhile, Iran’s oil shipments tumbled this month with not a single ship seen leaving the nation’s oil terminals for foreign ports.
“The fears over the fallout from the US-China trade war is impacting everything," said John Kilduff, partner at Again Capital LLC, a New York hedge fund focused on energy. “It’s just so damaging to the Asian economies in particular and it goes to the heart of the demand side of the equation in oil."
Crude has fluctuated between gains and losses this week as investors assess the likelihood of a tariff increase, while also focusing on risks to oil supply from the ending of Iran sanctions waivers and Venezuela’s economic crisis.
West Texas Intermediate crude for June delivery slid 91 cents to $61.21 a barrel at 10:03 a.m. on the New York Mercantile Exchange.
Brent for July settlement slipped 75 cents to $69.62 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude was at a premium of $8.34 to WTI for the same month.
Yet, a key technical indicator shows a potential rebound may be in store for crude. Brent crude is hugging the lower Bollinger band, indicating the commodity is oversold.
China’s top trade envoy, Vice Premier Liu He, is due to land in the US capital on Thursday afternoon and go immediately into discussions with President Donald Trump’s top negotiator, Robert Lighthizer. US tariffs on some $200 billion in Chinese goods are set to increase to 25% just hours later.
This story has been published from a wire agency feed without modifications to the text.