Commodities

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

Reuters TOKYO | Updated on September 02, 2019 Published on September 02, 2019

Beijing has levied a 5 per cent tariff on US crude for the first time since the world's two largest economies started their trade war more than a year ago.

Brent crude slipped 22 cents, or 0.4 per cent, to $59.03 a barrel by 0620 GMT, while US oil was down 2 cents at $55.083 at barrel.

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

Brent crude slipped 22 cents, or 0.4 per cent, to $59.03 a barrel by 0620 GMT, while US oil was down 2 cents at $55.083 at barrel.

The US began imposing 15 per cent tariffs on a variety of Chinese goods on Sunday - including footwear, smart watches 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 both sides would still meet for talks later this month. 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 per cent 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.

“Despite President Trump dismissing concerns about a protracted trade war, we are of the view that the latest escalation would not result in a trade deal anytime soon,” said Samuel Siew, investment analyst at Phillip Futures in Singapore.

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.

Published on September 02, 2019
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