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Oil dips as U.S./China trade dispute expected to stall economic growth

CommoditiesAug 09, 2018 21:40
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© Reuters. Oil dips as U.S./China trade dispute expected to stall economic growth

* Global markets slump as U.S., China threaten more tariffs

* But amid rising tensions, Beijing drops U.S. crude from list

By Henning Gloystein

SINGAPORE, Aug 10 (Reuters) - Oil prices fell on Friday, pulled down by concerns that the escalating trade dispute between the United States and China would stall economic growth and fuel demand.

Front-month Brent crude oil futures LCOc1 were at $71.89 per barrel at 0118 GMT, down 18 cents, or 0.25 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were down 10 cents, or 0.15 percent, at $66.71 per barrel.

Along with oil, Asian stock markets also fell on Friday amid heightened global trade tensions, as the world's two biggest economies threaten ever more tariffs on each other's products. market seems to be focused on fears of reduced demand from China, partially due to the effects of the trade wars between China and the United States," said William O'Loughlin, investment analyst at Australia's Rivkin Securities.

In the latest round, China said it would impose additional tariffs of 25 percent on $16 billion worth of U.S. imports, which would include refined products, autos and medical equipment. to oil markets, however, crude has been dropped off the list. Medlock, senior director of the Center for Energy Studies at Rice University's Baker Institute for Public Policy, said Beijing's decision to exclude U.S. crude reflected China's reliance on imports.

"The issue for the Chinese is that any tariff on U.S. exports (including) oil will likely hurt their economy disproportionately because they have to import," he said, noting that "U.S. exports will find a home regardless of how the global supply deck is reshuffled."

U.S. crude oil exports to China, seen as a tool to reduce America's trade deficit with Asia's biggest economy, have soared in the last two years and by the middle of this year were worth around $1 billion per month.

Oil dips as U.S./China trade dispute expected to stall economic growth
 

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