US, WASHINGTON (ORDO NEWS) — Oil is getting cheaper earlier this week due to fears that global oil surplus may persist amid falling demand and trade tensions between the US and China, which could hold back economic recovery, writes Reuters.
The cost of July Brent futures by 11:03 UTC decreased by 2.65% and amounted to $ 25.74 per barrel.
The price of WTI crude oil contracts for June delivery fell 7.18% to $ 18.36 a barrel.
Last week, futures rose in price due to signs of a decrease in the rate of infection with COVID-19. In addition, the largest oil producers, led by Saudi Arabia and Russia, agreed to reduce production from May 1. Two leading US producers, Exxon Mobil Corp and Chevron Corp, said they would cut production by 400,000 barrels per day this quarter.
Quotations were also supported by easing restrictions imposed to combat coronavirus in some US states and cities around the world.
However, reports that Washington is considering introducing new duties on Chinese goods as a way to punish Beijing for spreading the coronavirus have put an end to rising oil prices.
“The resumption of the trade war will negatively impact oil prices in the long run,” warned AxiCorp chief market strategist Stephen Innes.
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