Oil prices fall as U.S. trade dispute with China looms

WTI (oil futures on NYMEX) trims gains and looks to test the $ 64.50 support, having failed to sustain above the $65 mark on several occasions. Brent and WTI crude oil futures dipped on Monday as concerns of a looming trade dispute between the United States and China weighed on global markets. Chinese government officials however are confident that a carefully calibrated response to punitive tariffs outlined last week by US President Donald Trump will help contain the fallout from a Sino-US trade dispute. China surpassed the U.S. to become the world’s largest importer of crude in 2017.

Rightly so, China would want to play a more active role in influencing the price of crude oil, experts say. This fact weighed on crude oil futures as well. U.S. West Texas Intermediate (WTI) crude futures (CLc1) were at $65.49 a barrel at 0543 GMT, down 39 cents, or -0.6%, from their previous close. We shall see how the situation develops further. China surpassed the U.S. to become the world’s largest importer of crude in 2017. Rightly so, China would want to play a more active role in influencing the price of crude oil.

Shortly beforehand, Brent crude futures surpassed $70 per barrel for the first time since January.

Price of oil is also heavily influenced by the events in the Middle East.

Rising geopolitical risk in the Middle East has driven oil prices up recently. President Donald Trump continues to suggest the U.S. will pull out from the Iran nuclear deal, which raises concerns that sanctions will be reimposed on the country and severely limit Tehran’s ability to export crude oil.

These concerns escalated just over a week ago when Saudi Arabia’s Prince Mohammed bin Salman ramped up tough rhetoric over Iran, pledging to acquire nuclear weapons if Iran develops them. His recent talks with President Trump in Washington, pledging to buy more U.S. military equipment, also show that Saudi foreign policy is becoming more aggressive.

Sources:  

https://www.ft.com/content/e598c6b0-3022-11e8-b5bf-23cb17fd1498

https://www.fxstreet.com/markets/commodities/energy/oil

https://www.ft.com/content/e598c6b0-3022-11e8-b5bf-23cb17fd1498

https://www.ft.com/content/fa378ba4-2e99-11e8-9b4b-bc4b9f08f381

https://www.ft.com/markets/commodities

https://www.investing.com/news/commodities-news/brent-crude-oil-futures-above-70-per-barrel-on-middle-east-tension-1359217

https://www.investing.com/news/commodities-news/oil-prices-fluctuate-amid-middle-east-tension-launch-of-shanghai-oil-futures-1359299