By Sharon Cho and Grant Smith
Futures dropped to trade near $55 a barrel in New York, having lost 5.9% in August. U.S. tariffs on a further $110 billion of Chinese imports took effect on Sunday, and additional Chinese levies on American products — including oil for the first time — also kicked in.
The outlook for Chinese manufacturing deteriorated further in August, the latest evidence that the U.S.-China trade conflict is taking a toll on the global economy. Face-to-face talks between American and Chinese negotiators scheduled for this month are still on, President Donald Trump said Sunday, but investors see very little chance of a near-term breakthrough.
“Economic uncertainty will continue to dominate the oil market’s agenda as new U.S. and China trade measures come into effect,” said Harry Tchilinguirian, head of commodity-markets strategy at BNP Paribas SA. “The market is more and more resigned to a protracted stand-off and will be looking toward central-bank easing to shore up risk appetite to help overcome the prevailing hesitancy in going long oil.”
West Texas Intermediate for October delivery fell 7 cents to $55.03 a barrel on the New York Mercantile Exchange as of 8:57 a.m. local time after falling as much as 1.1% earlier. The contract lost $3.48 in August.
Brent for November settlement slid 23 cents to $59.02 a barrel on the ICE Futures Europe Exchange, and traded at a $4.21 premium to WTI for the same month. The October contract expired on Friday, having lost 7.3% last month.
The U.S. imposed previously announced duties of 15% on a wide range of Chinese consumer goods. Another batch of about $160 billion of China’s products — including laptops and mobile phones — will be hit with 15% levies on Dec. 15.