By Shariq Khan (Reuters) – Oil prices fell by nearly $3 per barrel on Thursday, wiping out the prior session’s rally, as investors reassessed the details of a planned pause in sweeping U.S. tariffs and focus shifted to a deepening trade war between Washington and Beijing. U.S. West Texas Intermediate crude futures fell $2.91, or […]
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Oil falls more than 4% as investors reassess Trump’s tariff flip
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By Shariq Khan
(Reuters) – Oil prices fell by nearly $3 per barrel on Thursday, wiping out the prior session’s rally, as investors reassessed the details of a planned pause in sweeping U.S. tariffs and focus shifted to a deepening trade war between Washington and Beijing.
U.S. West Texas Intermediate crude futures fell $2.91, or 4.7%, to $59.44 per barrel by 1:30 p.m. EDT (1730 GMT). Brent crude futures fell $2.77, or 4.2%, to $62.71 a barrel.
Both contracts had gained more than $2 a barrel on Wednesday after U.S. President Donald Trump paused the heavy tariffs he had announced against dozens of U.S. trading partners a week ago, marking an abrupt U-turn less than 24 hours after the levies took effect.
At the same time, however, Trump also raised tariffs against China. U.S. tariffs on Chinese imports now total 145%, the White House told media on Thursday.
China also announced an additional import levy on U.S. goods, imposing an 84% tariff last Thursday.
Higher tariffs against China are likely to prompt lower U.S. crude imports by Beijing, backing up supply and raising U.S. storage levels, trading advisory firm Ritterbusch and Associates told clients on Thursday.
U.S. crude oil exports to China fell to 112,000 barrels-per-day (bpd) in March, nearly half of last year’s 190,000 bpd, data from vessel tracker Kpler showed.
Meanwhile, U.S. crude stockpiles rose by 2.6 million barrels last week, government data showed on Wednesday, almost double the 1.4-million-barrel increase analysts projected in a Reuters poll.
Macquarie analysts on Thursday said they expect another build this week.
The U.S. is also moving ahead with a 10% levy on all of its imports.
The U.S. Energy Information Administration on Thursday lowered its global economic growth forecasts and warned tariffs could weigh heavily on oil prices, as it slashed its U.S. and global oil demand forecasts for this year and next. [EIA/M]
“The tariff-driven expectation of reduced demand amid the continued possibility of a U.S. recession will remain front and center of trader concerns in likely keeping a lid on near term price gains,” Ritterbusch and Associates said.
(Reporting by Shariq Khan and Arunima Kumar; Additional reporting by Ahmad Ghaddar and Jeslyn Lerh; Editing by Emelia Sithole-Matarise, Kirsten Donovan and David Evans)