Oil Slides as Latest China Tariffs Reignite Demand Fears
August 23 2019 - 9:34AM
Dow Jones News
By Amrith Ramkumar
Oil prices fell Friday after China said it would impose tariffs
on $75 billion worth of additional U.S. products including crude
imports, the latest protectionist trade policy that could crimp
fuel consumption.
U.S. crude futures fell 2.3% to $54.07 a barrel on the New York
Mercantile Exchange following the announcement, the newest salvo in
the U.S.-China trade spat that has swung markets in recent months.
Oil is about 18% below its April peak with analysts wary that
softening demand and steady supply will result in a glut.
Brent crude, the global gauge of prices, declined 1.6% to $58.96
a barrel on the Intercontinental Exchange.
U.S. crude is among the many products affected by new Chinese
duties in the coming months, and some analysts are wary that the
latest tariffs will further slow the global economy and weaken
commodity demand broadly. Chinese imports of U.S. oil have
generally fallen in recent months as the drawn-out trade spat
between the world's two largest economies continues.
Many organizations have revised down their expectations for
oil-demand growth in 2019, increasing pressure on the Organization
of the Petroleum Exporting Countries and other large suppliers to
limit output moving forward.
Generally rising inventories in the U.S. and globally have also
added to fears of excess supply, with several new production
sources around the world also expected to boost global crude output
next year.
Investors are looking ahead to scheduled trade talks between the
U.S. and China next month to see if the two sides can reach a
compromise.
They were also awaiting a speech from Federal Reserve Chairman
Jerome Powell later Friday, as some expect lower interest rates
around the world to help the global economy stabilize despite
continuing trade uncertainty.
Elsewhere in commodities Friday, natural-gas futures fell 1.5%
to $2.127 a million British thermal units, also hurt by continuing
fears of oversupply.
Most-active futures for copper, an industrial metal that counts
China as the largest source of global demand, declined 0.6% to
$2.5415 a pound on the Comex division of the New York Mercantile
Exchange to extend a recent slide.
Gold added 0.2% to $1,511.90 a troy ounce, staying near a
six-year high as nervous investors continued to boost the
safe-haven metal.
Write to Amrith Ramkumar at amrith.ramkumar@wsj.com
(END) Dow Jones Newswires
August 23, 2019 10:19 ET (14:19 GMT)
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