Oil prices fell about 2 percent on Friday after U.S. President Donald Trump threatened new tariffs on China, reigniting fears of a trade war between the world’s two largest economies that could hurt global growth, APA reports quoting Anadolu Agency.
Trump said on Thursday he had ordered U.S. trade officials to consider tariffs on an extra $100 billion of imports from China, escalating tensions with Beijing.
China warned on Friday it was fully prepared to respond with a “fierce counter strike” of fresh trade measures if the United States follows through on Trump’s threat.
“The heightened possibility of an outright tariff war is conjuring up images of slowed economic growth that could curtail the strong oil demand that has helped to revive a strong pricing environment during the past couple of months,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.
Brent crude LCOc1 futures settled down $1.22 at $67.11 a barrel. U.S. West Texas Intermediate (WTI) crude CLc1 futures fell $1.48 to $62.06 a barrel, a 2.3 percent loss.
Brent crude dropped 2.8 percent in the week while U.S. crude fell 4.4 percent, the biggest weekly decline since early February.
U.S. stock indexes also fell on trade war jitters, which weighed on oil prices. Crude futures have recently tracked with equities.
OPEC member Libya’s oil output is at around 1.05 million barrels per day despite a continuing outage since February at its 70,000 bpd El Feel oilfield, a Libyan oil source told Reuters on Friday.
U.S. drillers added 11 oil rigs in the week to April 6, bringing the total count up to 808, the highest level since March 2015, General Electric Co’s (GE.N) Baker Hughes energy services firm said in its closely followed report on Friday.
The Permian basin in Texas is leading the way as U.S. oil production has reached an all-time high, but the prolific output is causing bottlenecks as pipelines transporting the crude have filled up more quickly than expected, depressing prices in the region.