Oil prices fell on Monday after U.S. President Donald Trump said he would sharply raise tariffs on Chinese goods, risking derailment of trade talks between the world’s two largest economies, which renewed worries about global oil demand.
Brent crude futures fell 16 cents to $70.69 a barrel by 11:12 a.m. EDT (1512 GMT). The global benchmark earlier sank to $68.79 a barrel, the lowest since April 2.
U.S. West Texas Intermediate (WTI) crude futures lost 29 cents to $61.65 a barrel. WTI’s session low was $60.04 a barrel, the weakest since March 29.
On Sunday, Trump said on Twitter that tariffs on $200 billion of goods would increase on Friday to 25 percent from 10 percent, reversing his February decision to keep them at 10 percent due to progress in trade talks.
Early Monday, Trump appeared to defend his Sunday statement, citing the trade deficit between the United States and China. “Sorry, we’re not going to be doing that anymore!” he tweeted.
U.S. stock indexes fell on Monday, tracked by oil futures.
“The tariff headlines have revived concerns over slowed global economic growth with this implied reduction in risk acceptance playing out in a plunge in the equities with spillover into the oil space,” said Jim Ritterbusch, president of Ritterbusch and Associates.
Chinese Foreign Ministry spokesman Geng Shuang told a news briefing on Monday that a Chinese delegation was still preparing to go to the United States for trade talks.
“We are also in the process of understanding the relevant situation,” he said.
Trump’s threat to increase tariffs has outweighed the announcement that the United States is to send a strike group to the Persian Gulf, Vienna-based consultancy JBC Energy said.
In a sign of rising tensions in the region, the United States is deploying a carrier strike group and a bomber task force to the Middle East.
The deployment sends a clear message to Iran that any attack on U.S. interests or its allies will be met with “unrelenting force,” U.S. national security adviser John Bolton said on Sunday.
Within the oil industry, there are signs of a further rise in output from the United States, where crude production has surged by more than 2 million barrels per day (bpd) since early 2018 to a record 12.3 million bpd.
The United States is now the world’s biggest oil producer, ahead of Russia and Saudi Arabia.