Oil falls as US, China add more tariffs in trade war

Trump says the sides would still meet for talks later this month


Reuters September 02, 2019
An oil pump is seen at sunset outside Vaudoy-en-Brie, near Paris, France. PHOTO: REUTERS

Oil prices were lower on Monday after new tariffs imposed by the United States and China came into force, raising concerns about a further hit to global growth and demand for crude.

Brent crude was down 27 cents, or 0.5%, at $58.98 a barrel, while US oil was down 2 cents at $55.083 a barrel.

The United States began imposing 15% tariffs on a variety of Chinese goods on Sunday - including footwear, smartwatches and flat-panel televisions - as China put new duties on US crude, the latest escalation in a bruising trade war.

US President Donald Trump said the sides would still meet for talks later this month.

China to impose new tariffs on $75b of US imports

Trump, writing on Twitter, said his goal was to reduce US reliance on China and he again urged American companies to find alternate suppliers outside China.

Beijing’s levy of 5% on US crude marks the first time the fuel had been targeted since the world’s two largest economies started their trade war more than a year ago.

“The trade and tariff overhang is inescapable for oil markets, so while trade uncertainties persist, it will be difficult for oil to shrug off concerns about the threat to global demand,” said Stephen Innes, APAC market strategist at AxiTrader.

South Korea’s exports tumbled in August for a ninth consecutive month, on sluggish demand from its biggest buyer, China, and depressed prices of computer chips globally, government data showed on Sunday.

China, US kick off new round of tariffs in trade war

The bleak data clouded the outlook for Asia’s fourth-largest economy as a brewing trade dispute with Japan emerged as a new risk on top of the prolonged US-China trade war.

Elsewhere, oil output from members of the Organization of the Petroleum Exporting Countries rose in August for the first month this year as higher supply from Iraq and Nigeria outweighed restraint by top exporter Saudi Arabia and losses caused by US sanctions on Iran, a Reuters survey found.

In the United States, energy companies cut drilling rigs for a ninth month in a row to the lowest level since January last year.

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