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Oil prices seesawed in nervous trading on Friday as the United States slapped a raft of tariffs on Chinese goods in an escalating trade war between the world’s two biggest economies.
Oil prices initially fell on Friday, along with Asian stock markets. Yet by 0649 GMT, U.S. West Texas Intermediate (WTI) crude futures were up 16 cents, or 0.2 percent, from their last settlement at $73.10 per barrel. Brent crude futures LCOc1 were down 7 cents, or 0.1 percent, at $77.32.
The trade dispute between the United States and China is looming over oil markets. Washington put the tariffs in place on Chinese goods from 12:01 a.m. Washington D.C. time (0401 GMT) on Friday. China has said it will impose tariffs on 545 U.S. goods in return. Meanwhile, major Chinese ports have already delayed clearing goods from the United States, according to several sources.
“We’re headed for an unparalleled trade conflict between the world’s largest economies,” said Stephen Innes, head of trading for Asia/Pacific at brokerage OANDA. As part of the retaliatory response, Beijing has threatened a 25 percent tariff on U.S. crude imports, although it has not specified an introduction date.
American crude shipments to China are around 400,000 barrels per day (bpd), worth $1 billion a month at current prices.
Tariffs would make U.S. oil uncompetitive in China. An executive from China’s Dongming Petrochemical Group said he expected Beijing to soon impose the tariff on U.S. oil imports.
Trade Suggestion Sell CRUDE OIL At: 73.00, Take Profit At: 71.68, Stop Loss At: 74.15