Trade tensions tank oil prices amid escalating U.S.-China standoff
Oil prices on the U.S. stock exchanges are declining again after brief increases. CNBC noted that futures contracts decreased by more than 4 percent on Thursday. This decline is due to concerns about an escalation of the trade war between the United States and China.
A barrel of West Texas Intermediate crude on NYMEX in New York for May deliveries fell on Thursday to slightly below $60, and for a barrel of Brent on ICE for June deliveries to approximately $62,50, CNBC reports.
Commodity prices began to fall again after a temporary increase following a change of mind regarding tariffs by Donald Trump. On Wednesday, the U.S. president announced a 90-day pause in applying increased tariffs, excluding China. During this time, tariffs for almost all trading partners of the United States are to be 10 percent.
Oil prices rose briefly but began to fall again due to the expected escalation of the trade war between the U.S. and China. China is the world's largest importer of crude oil, and higher U.S. tariffs could negatively impact fuel and petrochemical consumption in the country.
Zhou Mi, an analyst at the Chaos Research Institute assesses that given that it is unlikely the US-China trade war will deescalate soon, yesterday's rebound in oil prices on the markets will not develop into a more sustained trend.
China prepares retaliation
The Chinese government decided on Wednesday to raise retaliatory tariffs on goods imported from the U.S. from 34 to 84 percent. This was in response to the implementation of tariffs by the U.S. administration totaling 104 percent.
China is ready to negotiate with the U.S. on tariffs, but the dialogue must be based on mutual respect and equality, said He Yongqian, spokeswoman for the Ministry of Commerce in Beijing, on Thursday.
Responding to numerous questions during a press conference, the spokeswoman strongly condemned the actions of U.S. President Donald Trump, who imposed tariffs totaling 125 percent on the import of Chinese products. She highlighted that although "in a tariff war or trade war, there are no winners," China will "fight to the end" in response to Washington's subsequent decisions.
