Oil prices have dropped for the fourth day following US plans to impose tariffs on steel and aluminium, in a move that could trigger an international trade war.
US plans to impose tariffs on steel and aluminium to safeguard its producers, which could trigger retaliatory measures from countries such as Canada and China.
Global benchmark Brent LCOc1 fell by 2 cents to touch $63.81, while US West Texas Intermediate (WTI) crude CLc1 dropped 11 cents to reach at $60.88, reported Reuters.
CMC Markets in Sydney chief market analyst Ric Spooner was quoted by the news agency as saying: “The market is not showing any obvious signs of turning around the mood. We are being driven by the pick-up in US inventories and in general terms the market went a bit too far too soon.
“Then we have the volatility in the US dollar and the implications of the tariff news to factor in.”
Last week, US crude stocks USOILC=ECI grew although refineries increased production by three million barrels, as against a forecast of 2.1 million barrel increase.
However, stocks dropped again at Cushing in Oklahoma, and inventories of USOICC=ECI fell by 1.2 million barrels, which is the drop for the tenth consecutive week, according to the Energy Information Administration.
Forex.com market analyst Fawad Razaqzada told the news agency: “Although destocking in Cushing has continued, with stocks there falling below 30 million barrels for the first time since late- 2014, the overall increase in US oil stocks has overshadowed the good news.”
OPEC will hold a meeting with US shale firms on Monday to cut down the oil glut.
US crude production fell in December 2017 after a hitting a peak of 10.057 million barrels per day (bpd) in November.