Oil prices have weakened on Monday shortly after the U.S. and China imposed new tariffs. The new tariff development has raised concerns about a further hit in global oil prices.
U.S. oil was down 2 cents at $55.083 a barrel, while Brent crude weakened 22 cents at $59.03 a barrel.
In a bruising trade war, the U.S., on Sunday imposed 15% tariffs on several Chinese goods including flat-panel televisions, footwears and smartwatches in retaliation on China putting additional duties on U.S. crude.
U.S. President Trump took on to Twitter and urged the American companies to find an alternate supplier outside China as per to reduce U.S. reliance on China. He added that both sides will still be meeting for talks later this month.
China levied 5% on U.S. crude, targeting fuel for the first time since the first trade war started more than a year ago between the two biggest economies.
Investment analyst at Philip Future in Singapore, Samuel Siew stated, “Despite President Trump dismissing concerns about a protracted trade war, we are of the view that the latest escalation would not result in a trade deal anytime soon.”
Reuters survey found that the oil output from the members of OPEC (Organization of the Petroleum Exporting Countries) rose for the first time in this year in August as a higher supply for Nigeria and Iraq override restrained by Saudi Arabia and losses caused by the U.S. sanctions on Iran.
The energy companies in the United States cut drilling rigs for a nine-month in a row to the lowest level since January last year.