NEW YORK (Reuters) – China's Friday was threatening to impose tariffs on US crude oil imports for the first time, putting prices down nearly 4% to two-week hours because the bilateral trade war was worried about going t in the amount of slowdown in global oil demand.
Seen pipes during sunset at Daqing oil field in Heilongjiang Province, China August 22, 2019. REUTERS / Stringer
China said raw raw would be among U. products which tariffs by 5% with them from September 1. US President Donald Trump responded with a series of command tweets for US companies to look at ways to close their operations in China.
The trade war between the two largest economies in the world has continued for more than a year and on financial markets with their movement. While the Chinese and US trade negotiators were discussing as late as this week, both sides do not appear to be ready to make a significant compromise and there was no sign of a ceasefire.
China, one of the world's leading importers, has sharply reduced U. shipments from a very high peak last year. With the latest tariffs, purchases are likely to end, traders and analysts said.
Shale growth helped the United States to become the world's largest oil producer, in front of Saudi Arabia and Russia, and exports have banned over 3 million barrels a day in late 2015.
“The oil market has now been officially trapped in the bonfire with the trade war championship, this time China was at the heart of the traditional Trump base with US oil producers,” said Michael Tran, director of energy strategy at RBC Capital. Markets in New York.
“China is the largest import growth region, US producers need, rather than the other way,” he said. “The United States will need to find other buyers from their crude oil, a challenge given the backdrop of a declining global demand.” T
U. shipments to China are made up of about 6% of total US raw exports on average to date this year, according to data from the Department of Energy and the Census Bureau.
CLc1 US West Texas Texas (WTI) raw futures were significantly reduced to 3.7% to $ 53.32 barrel on Friday, the lowest since August 9. The trade war is likely to rise more than the Brent international benchmark, said market sources.
“Chinese buyers (now) will be looking to buy Brent and Dubai crude oil and I would hope that it would lead to the expansion of Brent to WTI,” Andy Lipow, president of Lipow Oil Associates in Houston.
“Essentially what you have done is create a new demand for crude oil based on Brent at the cost of crude oil of origin.”
Raw exports to Asia to date in August show that weaker streams are around 892,000 bpd, a decrease of 360,000 pd since last month, according to Kpler's market intelligence firm. The fall was due to a reduction in shipments to South Korea and China, a decrease of 114,000 phd and 52,000 bpd respectively in August, tracing data showed the firm's vessels.
“There is likely to be further disruption even if the tariff is only 5%,” said Reid I'Anson, an energy economist at Kpler.
Reporting by Devika Krishna Kumar in New York, additional reporting at Collin Eaton in Houston, Laila Kearney and Jessica Resnick-Ault in New York; Edited by Richard Chang and Bernadette Baum
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