Oil extended losses as the U.S. labeled China a currency manipulator, escalating the trade war between the world's two biggest economies and sparking a sell-off in risk assets.

Futures in New York fell as much as 1.8% after declining 1.7% on Monday. The U.S. Treasury Department made the determination after Beijing allowed the yuan to weaken to the lowest level in more than a decade, while President Donald Trump called the move a “major violation.” Brent crude dropped below $60 a barrel for the first time in almost two months and more than $700 billion was wiped from the value of U.S. equities.

West Texas Intermediate oil for September delivery fell 47 cents, or 0.9%, to $54.22 a barrel on the New York Mercantile Exchange as of 8:31 a.m. Singapore time after dropping 97 cents earlier. The contract decreased 97 cents to close at $54.69 on Monday.

Brent for October settlement lost 40 cents, or 0.7%, to $59.41 a barrel on the London-based ICE Futures Europe Exchange. It slumped $2.08 to $59.81 on Monday, the lowest since mid-January. The contract traded at a premium of $5.30 to WTI for the same month.

Source : Bloomberg