Reuters: Oil dips in nervous trading as U.S.-China trade war looms

08:55, 06 July 2018
Economy
117 0
REUTERS

Brent crude futures LCOc1 fell 25 cents, or 0.3 percent, to $77.14 per barrel by 0317 GMT from their last close, Reuters said.

U.S. West Texas Intermediate (WTI) futures CLc1 were down 15 cents, or 0.2 percent, at $72.79.

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Weighing on prices was a rise in U.S. crude inventories C-STK-T-EIA of 1.2 million barrels in the week to June 29, to 417.88 million barrels, the U.S. Energy Administration (EIA) said on Thursday.

Looming larger over markets is the U.S./China trade dispute.

Washington has announced tariffs on Chinese goods from 12:01 a.m. Washington D.C. time (0401 GMT) on Friday.

China says it will retaliate, and U.S. President Trump said on Thursday he may ultimately impose tariffs on more than a half-trillion dollars worth of Chinese goods.

"We're headed for an unparalleled trade conflict between the world's largest economies," said Stephen Innes, head of trading for Asia/Pacific at brokerage OANDA.

Beijing has threatened a 25 percent tariff on U.S. crude imports, although it has not specified an introduction date.

American crude shipments to China are around 400,000 barrels per day (bpd), worth $1 billion a month at current prices.

Tariffs would make U.S. oil uncompetitive in China.

An executive from China's Dongming Petrochemical Group said he expected Beijing to soon impose the tariff on U.S. oil imports.

He added that his refinery had canceled U.S. crude imports and would switch to Middle East or West African supplies instead.

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