Oil prices tumble by more than two per cent after Trump announces new tariffs on Chinese goods

Oil prices tumbled by more than two per cent on Monday after United States (US) President Donald Trump on Sunday said he would sharply hike tariffs on Chinese goods this week, risking derailing months of trade talks between the world's two biggest economies.

US West Texas Intermediate (WTI) crude futures were at $60.44 per barrel at 0032 GMT on Monday, down $1.50 per barrel, or 2.4 per cent, from their last settlement.

Brent crude oil futures were at $69.34 per barrel, down $1.51 per barrel, or 2.1 per cent, from their last close.

Trump on Sunday said on Twitter he would drastically hike US tariffs on Chinese goods this week, pulling down global financial markets, including crude oil futures.

The Wall Street Journal reported that Beijing is considering cancelling all trade talks with Washington.

“Trump has taken the proverbial sledgehammer to the walnut this morning by threatening to slap a 25 per cent tariff on a mind-boggling $525 billion of Chinese goods by this Friday,” said Jeffrey Halley, senior market analyst at futures brokerage OANDA in Singapore.

Within the oil industry, there are signs of a further rise in output from the US, where crude production has surged by more than two million barrels per day (bpd) since early 2018, to a record 12.3 million bpd. That has made the US the world's biggest producer ahead of Russia and Saudi Arabia.

The number of rigs drilling for gas in the US fell by 3 to 183 in the week to May 3, while oil-directed drilling rigs rose by two to 807, data from oil services firm Baker Hughes showed on Friday.