SINGAPORE (Reuters) – Oil prices tumbled on Monday after U.S. President Donald Trump said he would sharply hike tariffs on Chinese goods this week, risking the derailment of trade talks between the world’s two biggest economies.

U.S. West Texas Intermediate (WTI) crude futures were at $60.57 per barrel at 0646 GMT on Monday, down $1.37 per barrel, or 2.2 percent, from their last settlement.

Brent crude oil futures fell below $70 per barrel, trading at $69.34 per barrel, down $1.51, or 2.1 percent, from their last close.

Trump said on Twitter on Sunday that he would drastically hike U.S. tariffs on Chinese goods this week, pulling down global financial markets, including crude oil futures.

“Trump’s sudden hard-line on China tariffs has spooked investors, who are scrambling to reduce their risk levels in the markets,” said Jasper Lawler, head of research at futures brokerage London Capital Group.

“The prospect of months of trade talks being derailed by Trump has raised concerns over future demand for oil,” he added.

Trump’s move triggered reports that China may cancel or at least cut short trade talks scheduled with Washington this week.

Within the oil industry, there are signs of a further rise in output from the United States, where crude production has already surged by more than 2 million barrels per day (bpd) since early 2018, to a record 12.3 million bpd. That has made the United States the world’s biggest producer ahead of Russia and Saudi Arabia.

The number of rigs drilling for gas in the United States fell by 3 to 183 in the week to May 3, while oil-directed drilling rigs rose by 2 to 807, data from oil services firm Baker Hughes showed on Friday.

Source: Read Full Article