Oil prices were little changed in early Asian trade on Friday after falling more than 1% in the previous session.
Wong Chunip | E+ | Getty Images
U.S. crude oil fell 4% on Friday after President Donald Trump threatened to raise tariffs on China in retaliation for China tightening export controls on rare earth minerals.
usa crude oil It fell $2.61, or 4.24%, to close at $58.90 per barrel. global benchmark brent It fell $2.49 (3.82%) to settle at $62.73 per barrel. Trade relations between China and the United States were thought to be slowly improving, but the latest setback has reignited concerns that higher tariffs could slow the global economy and hurt oil demand.
“As President of the United States, I will be forced to counter their moves economically,” Trump said on his social media platform Truth Social.
“One of the policies we’re considering right now is a significant increase in tariffs on Chinese products coming into the United States,” the president said. “There are many other measures that are being seriously considered as well.”
President Trump’s comments sent stock markets lower on Friday as investors hedged against new threats to the global economy.
Crude oil, 1 day
Andy Lipow, president of Lipow Oil Associates, told CNBC: “If we see these retaliatory actions in the market, it could lead to slower growth and even lower demand for the oil market.”
Oil prices have also come under pressure as OPEC+ has increased supply to the market in recent months.
“Oil prices spiked last month, but refinery maintenance has significantly reduced demand for crude oil, and inventory build-up is about to begin,” said Matt Smith, an oil analyst at Kepler.
A ceasefire between Israel and Hamas also appears to have come into effect in the Gaza Strip. Over the past two years, oil markets have repeatedly been nervous about the risk that the war in Gaza could boil over into a regional conflict, disrupting oil supplies.
“Market participants are essentially saying they can use this opportunity to step away from geopolitics and refocus on the supply situation,” Helima Croft, head of global commodity strategy at RBC Capital Markets, told CNBC.
