Global oil prices fell after the latest announcement made by US President Donald Trump regarding additional tariffs on Chinese imports, which clouded the crude demand outlook for the two countries.
Brent crude futures, the international benchmark for crude prices, slipped 29 cents, or 0.37%, to $77.76 per barrel, while US West Texas Intermediate (WTI) crude decreased 15 cents, or 0.22%, trading at $68.76, Reuters reported.
Trump announced that he would introduce 10% tariffs on Chinese imports worth around $200bn.
Guotai Junan Futures crude research head Wang Xiao was quoted by Reuters as saying: “The growing trade dispute has hurt trading sentiment. The impact on economic growth is slowly dripping in, which again hurts oil prices.”
China and the US are among the world’s biggest crude consumers and the ongoing trade war is affecting the demand outlook as the dip in trade is expected to hit growth in demand for oil.
Last week, refineries in the US used about 17.7 million barrels per day (bpd) of crude oil, while the figure in China for last month stood at around 11.8 million bpd.
However, oil prices are supported by potential supply cuts caused by impending US sanctions on Iran, a major crude producer.
According to government data, oil production from seven major US shale formations is anticipated to increase by 79,000bpd to 7.6 million bpd next month.
Meanwhile, Russia’s Energy Minister Alexander Novak said that OPEC and non-OPEC members will discuss all possible supply scenarios at a meeting scheduled to be held later this month in Algeria.