China imported about 180,000 barrels a day of US crude in July, according to UBS analyst Giovanni Staunovo. Bloomberg reported that the tariff on US crude imports will be subject to an additional 5% from next month.
The move is a response to the US decision to tariff all remaining Chinese imports by the end of the year. As expected, it further raises fears of how far each side in the U.S.-China trade dispute is prepared to go in the short term to achieve its long-term goals.
West Texas Intermediate crude futures traded in New York fell over 3% to $ 53.61 a barrel as of 8:30 AM ET (12:30 GMT), while crude futures Brent, the oil price rapper outside the US. BA fell 2.5% to $ 58.44.
Oil prices traded sharply lower on Friday, after China announced it would impose 10% average import tariffs on $ 75 billion of US goods, including gross and autos.
The news gave a stir in a market that had been pleased to host a speech by Federal Reserve Chairman Jerome Powell at the Jackson Hole Economic Symposium.
“Oil cravings are relying on Powell to sprinkle a little magic dust on the crude,” Investing.com senior commodity analyst Barani Krishnan said in a note. “Bears, meanwhile, are relying on US crude to continue offsetting supply disruptions or unexpected demand points.”
China’s revenge appeared timed to maximum effect, coming ahead of Powell’s speech at 10:00 AM ET (14:00 GMT). Powell is expected to provide data on whether the US central bank will cut interest rates a second time this year to boost the world’s largest economy.
The tariff battle between the world’s two largest oil consumers has been blamed for contributing to a weakening global economy.
Later on Friday, market concentration will shift to weekly Baker Hughes fraud count data at 1:00 PM ET.
In other energy trading, gasoline futures lost 0.5% to $ 1,6600 a gallon by 7:45 AM ET (11:45 GMT), while heating oil fell 0.6% to $ 1,8307 a gallon. .
Finally, futures for natural gas traded down 0.2% to $ 2,154 per million British thermal units./Investing.com