Economy

Oil prices tumble amid trade worries

Oil prices tumble amid trade worries

West Texas Intermediate for May delivery fell 4 cents to US$63.33 a barrel on the New York Mercantile Exchange as of 10.36am in London, after dropping 14 cents on Wednesday.

The Asian nation said Wednesday it would levy an additional 25 per cent tariff on about US$50 billion of U.S. imports, following which the White House National Economic Council Director Larry Kudlow spent much of the day trying to calm markets.

Oil prices rose yesterday as USA drilling activity drops as well as by expectations that the United States could re-introduce sanctions against Iran.

Oil prices retreated on Monday as concerns about trade tensions between China and the United States weighed on the market.

Market participants are anxious "it's the start of a trade war that could ultimately impact oil demand", said Andy Lipow, president of Lipow Oil Associates. The contract fell $1.93 to $63.01 on Monday, the most since February 9.

US crude production hit a new high, but that was not enough to change the overall bullishness of the report, said Baruch.

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Oil prices have traded in a range this year as investors have parsed data for signs of supply and demand.

Crude oil futures fell sharply Monday along with U.S. stocks. "There's not a lot of clarity".

The extent to which USA production increases counterbalances output cuts from the Organization of the Petroleum Exporting Countries will be critical, said Gene McGillian, manager of market research at Tradition Energy in Stamford.

"Yet, a 3.666 million barrel build at the Cushing, OK storage hub provided enough weight for a negative settlement". Innes said prices were also supported by a weekly report that there was a drop in activity of drilling for new oil production in the United States.

With China and the USA announcing new tariffs on the other's products by the day, and investors seeking asset classes safer than equities and oil, the market could "look past" any us crude oil inventory data, Harry Tchilinguirian, global head of commodity markets strategy at BNP Paribas, told MarketWatch on Wednesday.

Gasoline futures fell 2.3% to $1.9744 a gallon and diesel futures lost 1.8% to $1.9843 a gallon.

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