Oil Prices Slip Over U.S., China Tensions
TAYO ELEGBEDE
Oil futures traded below $42 per barrel following rising tensions between United States and China.
The tensions have been precipitated by the signing of executive orders by the United States President, Donald Trump prohibiting residents in the country from doing business with WeChat, TikTok or Chinese owned application.
The attack on the Chinese technological companies raised fears in the oil market when the West Texas Intermediate (WTI) traded down by 0.79 cent or 1.88 per cent, selling at $41.16 a barrel.
The Brent crude sold for $44.36 on Friday evening, a loss of 0.73 cent or 1.62 per cent.
The feud between the United States and China started last month following the closure of China’s consulate in Houston and retaliation in Chengdu by the Chinese Government.
The feud between the two world powers was as a result of the coronavirus, which the Trump administration accused China of failing to control, and also of espionage, intellectual property theft and human rights violations.
Bloomberg, however, in a report says oil is still set for a weekly gain after American crude inventories posted their biggest back-to-back weekly decline in a year.
“Crude rallied to a five-month high earlier this week, buoyed by a weaker dollar and the drop in U.S. stockpiles. But a sustained recovery in oil consumption is looking shaky, with crude imports into China shrinking in July, and Saudi Arabia this week cutting prices to Asia less-than-expected,” the report stated.
Meanwhile, Iraq’s Oil Minister, Ihsan Abdul Jabbar, on Friday, pledged to cut output by an extra 400,000 barrels a day in August and September, on top of a previous commitment to slash 850,000 barrels a day in each month.
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