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. Click Read More below for additional information.
Prices rose as much as 1.5 percent in New York on Monday. Still, summer demand for driving fuels should whittle away excessive inventories, according to Swedish bank SEB AB. Crude’s 14-day relative strength index dipped below 30 last week, a sign that prices had collapsed very quickly.
“There is currently no headline bullish driver pushing it higher,” said Bjarne Schieldrop, chief commodities analyst at SEB AB in Oslo. Prices are instead “rebounding on expectations for a tightening third quarter” while “technical indicators pointed to oversold territory.”
WTI for August delivery climbed as much as 64 cents to $43.65 a barrel on the New York Mercantile Exchange, and was at $43.48 at 10:12 a.m. in London. Total volume traded was about 19 percent above the 100-day average. Prices are down about 10 percent this month.
Brent for August settlement gained as much as 70 cents, or 1.5 percent, to $46.24 a barrel on the London-based ICE Futures Europe exchange. Front-month prices lost 3.9 percent last week. The global benchmark crude traded at a premium of $2.54 to WTI.
more at: https://www.bloomberg.com/news/articles/2017-06-25/oil-trades-near-43-after-fifth-weekly-loss-as-drillers-add-rigs