Oil tumbled for a second day because the U.S.-China trade war intensified against the backdrop of ballooning American crude inventories.
Futures fell as much as 2.6% in New York this Thursday. In the latest barrage of the dispute between the world’s largest economies, the Chinese government mentioned it “has no choice but to take needed measures to retaliate” in opposition to new planned U.S. levies on billions of dollars in products. In the meantime, U.S. oil stockpiles have expanded by about 4 million barrels during the previous two weeks, ceasing almost two months of storage withdrawals.
U.S. crude oil stockpiles rose by 1.58 million barrels last week
China’s menace to retaliate adopted U.S. President Donald Trump’s decision to postpone new levies on $300 billion in Chinese goods. Oil has fallen almost 7% this month because the trade war intensified the global economic outlook and ample crude production from American fields remained near a file. Buyers are fleeing risky property akin to oil and in search of shelter in U.S. government debt, gold, and the Japanese yen.
West Texas Intermediate crude for September delivery slipped 53 cents to $54.70 a barrel at 11:31 a.m. on the New York Mercantile Exchange.
Brent for October settlement declined $1.20 to $58.28 on the ICE Futures Europe Exchange. The global benchmark traded at a $3.67 premium to WTI for the same month.
U.S. stockpiles rose by 1.58 MMbbl final week, confounding analysts who forecast a decline. The increase was especially bearish as it happened during the peak U.S. summer driving season when demand for motor fuels typically surges.