Oil tumbled toward $60 a barrel as President Donald Trump threw trade talks between the world’s two largest economies into disarray with a threat to raise tariffs on Chinese imports, roiling global markets.
Futures plunged as much as 3.1 percent in New York to the lowest level in five weeks. China was said to be considering delaying a trip by its top trade negotiators to Washington this week after Trump threatened on Sunday to raise tariffs on $200 billion of Chinese imports to 25 percent from 10 percent. Saudi Arabia also cut June pricing for all crude grades to the U.S. in a move that appeared to be aimed at easing concern over supplies.
Crude has retreated around 10 percent after reaching a six-month high in late April on signs the global supply outlook may not be as tight as previously feared. Investors have also been losing faith in this year’s rally, with money managers slashing optimistic wagers on U.S. oil prices last week for the first time since February. The possibility the world’s two largest economies won’t reach a trade deal threatens to remove a crucial support for prices.
West Texas Intermediate crude for June delivery fell $1.49, or 2.4 percent, to $60.45 a barrel on the New York Mercantile Exchange at 12:35 p.m. in Singapore and dropped as much as $1.90 earlier. It lost 2.2 percent last week.
Brent for July settlement declined $1.55, or 2.2 percent, to $69.30 a barrel on the London-based ICE Futures Europe exchange. It fell to $68.79 earlier, the lowest since April 2. The global benchmark crude was at a premium of $8.69 to WTI for the same month.
Source : Bloomberg