Oil Prices Dips Amid Concerns Over China-U.S. Trade Dispute

Investing.com – Oil prices traded lower on Thursday over concerns that U.S.-China trade war is set to ratchet up a few notches as the Trump administration could impose a 25% tariff on $200 billion worth of Chinese imported goods after the comment period expires on Thursday.

On the New York Mercantile Exchange for October delivery lost 0.3% to $68.52 a barrel, while on London’s Intercontinental Exchange, fell 0.2% to trade at $77.11 a barrel.

Some fear that a prolonged trade war between the U.S. and China, the world’s two largest economies, would stifle global economic growth, hurting demand for oil.

“The prospects of increased supplies from OPEC and her allies, and weaker demand from China and other emerging markets could weigh further on oil prices going forward, or at least limit the upside potential,” said Fawad Razaqzada, market analyst at futures brokerage Forex.

“This is because of the U.S. dollar’s strength, weighing heavily on emerging market currencies, including the yuan, which in turn has pushed up the costs of all dollar-denominated commodities,” he added.

Meanwhile, data from the American Petroleum Institute showed on Wednesday that crude inventories fell by 1.17 million barrels to 404.5 million barrels in the week to Aug. 31, while refinery crude runs rose by 198,000 barrels per day (bpd).

In other news, the U.S. and India are in talks over Washington’s request to completely stop India’s oil imports from Iran, a senior U.S. State Department official told reporters on Thursday.

“We’re asking all of our partners, not just India, to reduce to zero oil imports from Iran and so I’m confident that will be part of our conversation with India,” the official said ahead of high-level talks between the foreign and defense heads of India and the United States.

“There are very detailed conversations taking place between the U.S. and India on just the technical issues related to going to zero and those conversations will continue.”

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