Oil prices plunged more than 7% on Thursday to a seven-week low after President Trump said he would impose a 10% tariff on $300 billion worth of Chinese imports from September 1.
The protracted trade war between the world’s two largest economies has raised concerns about oil demand.
| http://www.lubonchem.com/ |
Brent crude oil futures plunged $4.55, or 6.99%, to close at $60.50 a barrel, once falling to $60.02, the lowest level since June 13. Thursday saw the biggest one-day percentage decline since February 2016.
U.S. crude oil futures plunged $4.63, or 7.9%, to close at $53.95 a barrel, after falling to the lowest level since June 19 at $53.59. Thursday recorded the largest percentage decline since February 2015.
“Oil prices have fallen sharply today, frustrated by the Federal Reserve’s policy of easing and the announcement by President Trump of tariffs on Chinese imports,” said John Kilduff, partner in Again Capital Management.
“The U.S. -China trade war has seriously damaged the prospects for energy demand, which only exacerbates these concerns,” he said. “The trade war is clearly far from over.”
| Sodium Molybdate |
Oil prices fell earlier and continued to respond to the Federal Reserve’s policy decision on Wednesday. The Federal Reserve cut rates as expected, but Fed Chairman Powell said the rate cut may not be the beginning of a series of rate cuts to help the economy withstand the risk of global economic weakness, which reversed market sentiment.
The Fed’s information did not match market expectations, triggering a rebound in the dollar. The dollar index rose to a 26-month high of 98.93 on Thursday. The strength of the dollar has made dollar-denominated oil more expensive for holders of other currencies. After Trump commented on tariffs, the dollar index moved below flat.
The bearish momentum of crude oil prices is likely to continue after Thursday’s fall below key support levels, said Edward Moya, senior market analyst at OANDA.
Oil prices fell on Thursday, although U.S. inventories fell more than expected, and the Organization of Petroleum Exporting Countries (OPEC) cut production in July, which is usually a profit-driven factor in oil prices.
Manufacturing activity in the United States slowed to a nearly three-year low in July, and new factory orders rebounded slightly, suffering from the negative impact of the trade war between the United States and China.
| Benzalkonium chloride |
Other data released on Thursday showed that the number of new jobless claims rose last week and construction spending fell in June as private construction investment fell to its lowest level in a year and a half.
Data released Thursday showed that overall U.S. oil demand fell by 98,000 barrels a day in May to 20.26 million barrels a day.