Oil prices weakened on Monday following the entry into force of fresh tariffs enforced by the US and China, raising worries about another hit on global growth and crude demand.
Brent crude slipped 22 cents, or 0.4%, to $59.03 a barrel by 0620 GMT, while U.S. crude slipped 2 cents to $55,083 a barrel.
The U.S. started to impose tariffs of 15 percent on a number of Chinese products on Sunday — including footwear, smart watches, and flat-panel television — as China placed fresh duties on U.S. crude, the recent escalation in a bruising trade war.
U.S. President Donald Trump said both parties are still going to meet later this month for discussions. Trump, writing on Twitter, said his objective was to decrease U.S. dependence on China and again encouraged American businesses to discover alternative vendors outside of China.
Beijing’s 5 percent levy on U.S. crude marks was targeted for the first time since the world’s two largest economies began 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.
Otherwise, oil production from members of the Petroleum Exporting Countries Organization increased for the first month of this year in August as greater supplies from Iraq and Nigeria outweighed the restraint of Saudi Arabia’s top exporter and losses caused by U.S. sanctions against Iran, media study reveals.
Energy companies in the United States have cut drilling rigs to the smallest level since January last year for a ninth month in a row.
