Oil prices slipped on Wednesday on concerns that the pending Phase 1 trade deal between the United States and China, the world’s biggest oil users, may not boost demand as the US intends to keep tariffs on Chinese goods until a second phase. US Treasury Secretary Steven Mnuchin said late on Tuesday that tariffs on Chinese goods will remain in place until the completion of a second phase of a US-China trade agreement, even as both sides are expected to sign an interim deal later on Wednesday. Brent crude was down 19 cents, or 0.3%, at $64.30 per barrel by 0428 GMT. US West Texas Intermediate crude futures were down 19 cents, or 0.3%, at $58.04 a barrel. “A pickup with global demand for crude may struggle as US-Chinese tensions linger after some hardline stances from the Trump administration,” said Edward Moya, analyst at brokerage OANDA. “Financial markets are disappointed that the Trump administration … signalled tariffs will remain in place until after the 2020 US Presidential election, depending on whether China comes through on their promises with the phase-one agreement.” US President Donald Trump is slated to sign the Phase 1 agreement with Chinese Vice Premier Liu He at the White House on Wednesday. That agreement is expected to include provisions for China to buy up to $50 billion more in US energy supplies. Adding to worries over US-China trade relations, the US government is nearing publication of a rule that would vastly expand its powers to block shipments of foreign-made goods to Chinese technology giant Huawei, according to two sources.
Oil drops on concerns that US-China trade deal may not stoke demand
Published on: January 16, 2020 5:22 AM