Crude pared losses after a government report showed the biggest decline in domestic crude inventories since September 2016, yet fears of an escalating trade war with China overshadowed the drop.
Futures edged up from a 2 percent decline in New York after the Energy Information Administration reported Wednesday that U.S. crude stockpiles shrank by 12.6 million barrels last week. Still, oil prices remained down for the session as investors worried over the Trump administration’s list of $200 billion in Chinese goods that could face 10 percent tariffs once public consultations end in August.
West Texas Intermediate crude for August delivery slipped 63 cents to $73.48 a barrel at 10:35 a.m. on the New York Mercantile Exchange. Total volume traded was about 9 percent below the 100-day average.
Brent for September settlement fell $1.42 to $77.44 on the London-based ICE Futures Europe exchange. The global benchmark traded at a premium of $5.55 to WTI for the same month.
If proposed U.S. tariffs on Chinese goods go into effect, duties will cover nearly half of all American imports from the Asian nation. At the same time, shipments resumed at Libya’s eastern oil ports, pushing crude prices lower. (Bloomberg)