Sign Up for FREE Daily Energy News
  • Stay Connected
  • linkedin
  • twitter
  • facebook
  • youtube2

Hazloc Heaters
Copper Tip Energy Services
Copper Tip Energy
Hazloc Heaters

Oil Drops as Trump’s Battle With China Offsets Iranian Tensions

English Español 简体中文 हिन्दी Português
These translations are done via Google Translate
May 9, 2019, by Saket Sundria and Alex Longley

Oil fell as flaring trade tensions between the world’s two biggest economies overshadowed concerns over supply disruptions from Iran to Venezuela.

Futures in New York fell as much as 1.3%, before paring some of those losses, as U.S. President Donald Trump escalated his rhetoric against China, saying the Asian nation “broke the deal” they were negotiating. Beijing has warned it will retaliate if he follows through on a plan to raise tariffs.

Crude has fluctuated this week as traders weigh trade-war concerns against geopolitical risks to oil supply, as well as a surprise decline in American crude stockpiles. As the U.S. and China prepare for fresh negotiations already clouded by imminent tariff increases, equities and commodities dropped globally on Thursday.

“With equity markets down, the risk-off environment is not helping oil,” said Giovanni Staunovo, a commodity analyst at UBS Group AG. “That could change though, as the U.S. oil inventory report was positive in contrast to previous weeks.”

West Texas Intermediate crude for June delivery fell as much as 78 cents to $61.34 a barrel on the New York Mercantile Exchange, and was trading at $61.95 as of 10:56 a.m. London time. The contract closed up 72 cents at $62.12 on Wednesday.


Brent for July settlement traded little changed at $70.34 a barrel on the London-based ICE Futures Europe exchange, after advancing 0.7% on Wednesday. The global benchmark crude was at a premium of $8.29 to WTI for the same month.

Trump made his latest comments on trade at a campaign rally in Florida, just hours before Chinese Vice Premier Liu He was set to arrive in Washington for talks. The U.S. is poised to raise tariffs on $200 billion of Chinese goods to 25% from 10% on Friday.

Oil’s gain on Wednesday followed U.S. government data that showed a 3.96 million-barrel decline in nationwide crude inventories in the week to May 3, surprising analysts who forecast a 1.9 million-barrel increase. Inventories still remain high, close to levels last seen in September 2017.

The market this week has also been roiled by a threat from sanctions-hit Iran to abandon a 2015 nuclear accord, while Venezuela’s economic crisis continues to curtail its oil exports. Speculation is swirling over whether other major producers such as Saudi Arabia will pump more to ease a supply crunch.

Other oil-market news: About half of Iran’s oil exports for April were still at sea in early May when the U.S. waivers expired, FGE said in a note. Uncontaminated Urals crude is due to arrive at the Baltic port of Ust-Luga by Thursday, with the quality of the grade improving, according to traders. Polish refiner  PKN Orlen SA has said it hopes Russian oil supplies will be restored by the end of May. Royal Dutch Shell Plc said the force majeure on crude exports from the Bonny terminal in  Nigeria remains in place, after being declared on April 25.

Share This:

More News Articles