Oil prices fell more than $2 a barrel on Thursday, erasing the last session's rally, as investors reassessed a planned pause in broad U.S. tariffs and turned their attention to the deepening trade war between Washington and Beijing.
U.S. West Texas Intermediate crude fell $2.28, or 3.7%, to settle at $60.07 a barrel. Brent crude fell $2.15, or 3.3%, to settle at $63.33 a barrel.
Both contracts had risen more than $2 a barrel on Wednesday after U.S. President Donald Trump halted the heavy tariffs he had announced on dozens of U.S. trading partners a week ago, marking an abrupt change of direction less than 24 hours after the levies took effect.
At the same time, however, Trump also raised tariffs on China. U.S. tariffs on Chinese imports now stand at 145%, the White House told reporters on Thursday. China announced additional import levies on U.S. goods, imposing tariffs of 84%. Higher tariffs on China are likely to drive down Beijing's imports of U.S. crude, leading to higher supplies and higher U.S. storage levels, trade advisory firm Ritterbusch and Associates told clients on Thursday. U.S. crude exports to China fell to 112,000 barrels per day (bpd) in March, nearly half the 190,000 bpd a year ago, data from ship tracker Kpler showed.
"If this trade dispute drags on much longer, it's likely to do significant economic damage to the global economy," said Henry Hoffman, co-manager of the Catalyst Energy Infrastructure Fund portfolio. U.S. crude stocks rose 2.6 million barrels last week, government data showed on Wednesday, nearly double the 1.4 million-barrel increase projected by analysts in a Reuters poll. Macquarie analysts said on Thursday they expected another build this week. The United States is also moving ahead with a 10% levy on all its imports. The U.S. Energy Information Administration on Thursday lowered its global economic growth forecast and warned that tariffs could weigh heavily on oil prices, as it slashed its forecasts for U.S. and global oil demand for this year and next. "Tariff-driven expectations of reduced demand amid a possible U.S. recession will remain top of mind for traders, likely limiting near-term price gains," Ritterbusch and Associates said. (Newsmaker23)
Source: Reuters
