Crude Oil Prices Settle More Than 2% Lower on Growing US-China Tensions

Investing.com – Crude oil prices settled at two-week lows on Friday as investors fled riskier assets amid escalating U.S.-China trade tensions, while U.S. oil rig counts jumped to a three-year high adding to downside momentum.

On the New York Mercantile Exchange for May delivery fell 2.3% to settle at $62.06 a barrel, while on London’s Intercontinental Exchange, lost 1.9% to trade at $67.03 a barrel.

Crude oil prices extended losses following data from energy services firm Baker Hughes showing the number of oil rigs operating in the US , the highest level since March 27, 2015.

That added to ongoing fears over rising U.S. output, which climbed for a sixth straight week to 10.46 million barrels a day, according to data Wednesday from the Energy Information Administration.

The report came amid bearish sentiment on riskier assets such as oil as trade-war fears resurfaced after President Donald Trump’s instructed his administration to consider an additional $100 billion in tariffs on Chinese imports.

Crude futures fell to a second weekly slump as trade-war fears dominated direction throughout the week despite some investor relief Wednesday, when a larger than expected draw in crude supplies, helped oil prices cut losses.

Analysts, however, pointed to rising geopolitical tensions as a supportive factor for oil prices, amid growing expectations that global crude supplies could face disruption as the threat of sanctions against both Iran and Venezuela have increased.

“We have raised our estimate for Brent in 2018 to $67.50 a barrel as the geopolitical risk premium has increased since the arrival of Mike Pompeo at the Secretary of State and John Bolton as national security advisor, making sanctions against Iran and Venezuela more likely,” Natixis Research said earlier this week.

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