Oil fell after China said it would levy tariffs on $50 billion of U.S. imports in retaliation against measures by President Donald Trump, fanning concerns that economic growth and fuel demand could be hurt.
Futures in New York slipped as much as 2.1 percent to the lowest intraday price since March 20. China’s Ministry of Commerce said it would levy 25 percent tariffs on imports of 106 U.S. products including automobiles and aircraft. That wiped out earlier support for prices as Organization of Petroleum Exporting Countries output dropped to the lowest in a year in March.
“It’s only logical to see profit-taking in light of looming trade tensions and possible financial market turbulence,” said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt.
Global equities sank after China unveiled its charges, which match the scale of proposed U.S. tariffs announced earlier this week and ratchets up tension in a brewing trade war between the world’s two largest economies. With products ranging from gas turbines to steel and aluminum affected, the spat threatens to raise costs, slow economic growth and hit oil demand.
West Texas Intermediate for May delivery was at $62.38 a barrel on the New York Mercantile Exchange, down $1.13, at 11 a.m. in London, after rising 50 cents on Tuesday. Total volume traded was 12 above the 100-day average.
Brent for June settlement lost $1.11 to $67.01 a barrel on the London-based ICE Futures Europe exchange, after adding 48 cents on Tuesday. The global benchmark crude traded at a $4.62 premium to June WTI.
In the U.S., crude stockpiles unexpectedly fell 3.28 million barrels last week, the American Petroleum Institute was said to report. That would be the biggest drop since January if confirmed by the Energy Information Administration’s data Wednesday. Inventories are forecast to have risen by 2 million barrels, according to a Bloomberg survey. — Bloomberg

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