Mubasher: Oil prices fell early on Wednesday, with Brent contracts shedding more than $1 at one point after US President Donald Trump threatened to impose new trade duties on Chinese imports.
US Nymex futures went down 0.7% to $73.56 per barrel (pb), while global benchmark Brent crude futures plummeted 1% to $78.11 pb, having fallen as low as $77.60 pb.
The possibility of US tariffs on additional $200 billion in Chinese imports impacted the commodities as well as stock markets, with the escalating trade dispute between Washington and Beijing.
“The trade concerns have bitten today and the reason is that this is above and beyond what the market was expecting,” Sydney-based chief markets strategist at CMC Markets Michael McCarthy told Reuters.
Moreover, oil prices were impacted by the news that the White House would consider requests from some countries to be exempted from sanctions due to be put into effect by 4 November to cut Iran’s oil exports, as stated by US Secretary of State Mike Pompeo.
In the same vein, the American Petroleum Institute (API) reported on Tuesday that crude inventories in the US dropped last week by 6.8 million barrels.
A poll by Reuters estimated that US oil inventories would drop by 4.5 million barrels, ahead of the Energy Information Administration (EIA) data due later in the day.
By 6:33 am GMT, US Nymex futures fell 0.58% to $73.68 pb, while Brent crude futures dropped by 0.86% to $78.18 pb.
This article provided by NewsEdge.