Home / International/ Oil pares gains as US escalates trade war with China

Oil pares gains as US escalates trade war with China

Comments / {{hitsCtrl.values.hits}} Views / Saturday, 11 May 2019 00:02


A View Of A Drilling Rig And Distant Production Platform In The Soldado Field Off Trinidad's Southwest Coast - Reuters


TOKYO (Reuters): Oil prices pared earlier gains on Friday following US President Donald Trump’s tariff increase on $ 200 billion worth of Chinese goods took effect, escalating the trade dispute between the world’s two biggest economies and oil consumers.

Prices had risen more than 1% earlier in the day as optimism mounted that the tariffs would be averted after US Trump said he received a “beautiful letter” from Chinese President Xi Jinping.

With no move from the Trump administration to reverse the hikes, US Customs and Border Protection imposed the new 25% duty on affected US-bound cargoes leaving China after 12:01 a.m. EDT (0401 GMT) on Friday.

Brent crude futures were at $ 70.41 a barrel at 0523 GMT, up 2 cents from their last close, after rising to as high as $ 71.23 a barrel.

US West Texas Intermediate (WTI) crude futures were at $ 61.78 per barrel, up 8 cents, after rising to as high as $ 62.49 a barrel earlier in the day.

US stock futures fell and Asian shares pared gains as China said it would retaliate over the tariff increases.

“Oil prices along with most risk assets are moving almost in sync on trade tariff updates,” said Edward Moya, senior market analyst at futures brokerage OANDA.

Trump threatened to levy the additional tariffs on Sunday on signs that China would not accept portions of the trade agreement that it earlier indicated it accepted.

A break down in trade between the world’s two largest oil consumers would likely impact oil demand. The two countries combined to make up 34% of global oil consumption during the first quarter of 2019, according to data from the International Energy Agency.

Concerns of rising oil supply on reports of growing stockpiles along with the potential impact on demand has pushed oil prices lower for the week.

US crude is heading for a weekly loss of 0.3%, its third week of consecutive declines. Brent is heading for its second weekly loss, down 0.6%

However, the efforts by the Organisation of the Petroleum Exporting Countries (OPEC) to crimp supply to reduce global inventories has supported prices.

Overall expectations are also that demand in 2019 will rise.

The US Energy Information Administration expects global oil demand to rise by 1.4 million barrels per day this year.

Share This Article

Facebook Twitter


1. All comments will be moderated by the Daily FT Web Editor.

2. Comments that are abusive, obscene, incendiary, defamatory or irrelevant will not be published.

3. We may remove hyperlinks within comments.

4. Kindly use a genuine email ID and provide your name.

5. Spamming the comments section under different user names may result in being blacklisted.


Today's Columnists

Trendvertising: The new world of communication in a hashtag world

Tuesday, 20 August 2019

Rahul Bose, an Indian actor, caught a lot of attention for a video post that went viral, where he complained about the price of bananas during his stay at a five-star hotel in Mumbai. As he explained in his story – he went to the gym at his hotel w

Company Law intertwined with Income Tax – Understanding the nexus! Part II

Tuesday, 20 August 2019

A comparison and analysing the impact of corresponding provisions of Companies Act No. 7 of 2007 and Inland Revenue Act No. 24 of 2017 reveals invaluable insights corporate management must be aware of in day-to-day management activities as well as st

Will ‘10 February’ be repeated?

Tuesday, 20 August 2019

Whilst Sri Lanka is in election mode, the thought crossing every Sri Lankans mind is, ‘Will the 10 February 2018 elections behaviour be repeated?’ given the head-start that ‘Brand Gota’ has got. Whilst many are speculating who will be the fig

Shanta Devarajan: Economist who cannot get disconnected from his motherland

Monday, 19 August 2019

For me, Shanta Devarajan, formerly the Acting Chief Economist of the World Bank Group succeeding the Nobel Laureate Paul Romer and presently Professor at Georgetown University, USA, was a legend by himself. When I met him in early part of the new mil

Columnists More

Special Report