Trade tensions drive oil prices down as US‑China standoff intensifies
Oil prices on the US stock exchanges are falling again after brief increases proved short-lived. CNBC reported 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.
On Thursday, a barrel of West Texas Intermediate crude for May delivery on NYMEX in New York fell to slightly below $60, while a barrel of Brent crude for June delivery on ICE dropped to approximately $62.50, according to CNBC.
Commodity prices began to fall again after a short-lived increase following a change in tariffs by Donald Trump. On Wednesday, the US 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 set to be 10 percent.
Although oil prices briefly rose, they began to fall again due to the expected escalation of the trade war between the US and China. China is the world's largest importer of crude oil, and higher US 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
On Wednesday, the Chinese government decided to raise retaliatory tariffs on goods imported from the USA from 34 to 84 percent. This move was in response to the US administration's tariffs totaling 104 percent.
China is ready to negotiate with the USA 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 US President Donald Trump, who imposed tariffs totaling 125 percent on imports 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.
