Oil Prices Drop by More Than 3% Lowering Brent Crude to $59.81 per Barrel

August 06, 2018

Global oil benchmark Brent futures fell more than 3% on Monday on global growth concerns after U.S. President Donald Trump last week threatened China with more tariffs, which could limit crude demand from the world’s two biggest buyers.

Brent crude fell by $2.08, or 3.36%, to settle at $59.81 a barrel.

U.S. West Texas Intermediate (WTI) crude futures fell by 97 cents, or 1.74%, to settle at $54.69 a barrel, finding some support from a draw in inventories at the Cushing, Oklahoma, storage hub and delivery hub for WTI.

Both crude benchmarks plummeted by more than 7% last Thursday to their lowest level in about seven weeks after Trump’s announcement, before recovering somewhat to leave Brent down 2.5% on the week and U.S. crude 1% lower.

Trump last week said he would impose a 10% tariff on $300 billion of Chinese imports starting on September 1^st, and said he could raise duties further if China’s President Xi Jinping failed to move more quickly toward a trade deal.

On Monday, China let the yuan tumble beyond the 7-per-dollar level for the first time in more than a decade.

A lower yuan raises the cost of dollar-denominated oil imports in China, the world’s biggest crude oil importer.

Signs of rising oil exports from the United States also pressured prices on Monday. U.S. shipments surged by 260,000 barrels per day (bpd) in June to a monthly record of 3.16 million bpd, U.S. Census Bureau data showed on Friday.

(Reuters)