Futures in New York are up 1.5 percent this week after closing at the highest level in two weeks on Thursday. While the U.S. is pumping near record volumes, exports also jumped to a four-month high last week, helping drain the nation’s stockpiles. Oil stocks in the biggest U.S. storage hub plunged to the lowest level in more than three years. While crude struggled after the best January performance in more than a decade, it’s now finding its footing again as the Organization of Petroleum Exporting Countries and its allies including Russia pledge to persist with output curbs to re-balance the market, and demand remains robust. Click Read More below for additional information.
The war of words over trade between the United States and China finally turned into an actual trade war Friday, after the administration of President Donald Trump announced a list of goods whose import from China, worth $50 billion in 2017, would be subject to an additional tariff of 25 percent. Among the retaliatory measures announced by the Asian country was the proposed imposition of tariffs on imports of petroleum products from the U.S., a move that sent domestic crude oil prices crashing.
The fall in WTI crude is not in tandem with the global benchmark, Brent crude, which was trading about 0.7 percent higher Monday morning than a day before. The two prices are separated by a few dollars, Brent usually costing more, but that gap has increased in recent weeks for a number of reasons. However, the different directions in trade at present are caused largely by China’s announcement.
After listing 545 U.S. products, worth $34 billion, on which it will impose a 25 percent import duty from July 6, China announced another list of 114 goods, worth $16 billion, on which it will impose a similar tariff, with the final measures and the time they go into effect to be announced later. Most of the items on the second list are related to the petroleum industry, all the way from crude oil to fuel for cars and aircraft to other products like naphtha, grease and lubricants, to natural gas and propane and even wax, and further downstream to include various polymers and plastics.
Production of crude oil in the U.S. is at an all-time high and rising, with the country now only second to Russia globally, having overtaken Saudi Arabia a few months ago. According to data from the U.S. Energy Information Administration, the country exported almost 28.5 million barrels of crude oil and petroleum products in March 2018, of which over 18.4 million barrels, or close to 65 percent, was imported by China.
more detail at source: https://www.msn.com/en-us/finance/markets/china-tariffs-hurt-us-crude-oil-price/ar-AAyNNhN