Friday July 6, 2018 witnessed frequent fluctuations in oil prices as a result of U.S’s imposition of tariff’s against Chinese goods and an expected retaliation from China in terms of potential imposition of duty on United States (U.S) crude. Oil prices initially fell earlier the same day, along with Asian stock markets.
U.S. West Texas Intermediate (WTI) crude futures were up 16 cents, or 0.2 percent, from their last settlement at $73.10 per barrel.
Brent crude futures LCOc1 were down 7 cents, or 0.1 percent, at $77.32.
The much anticipated trade war between the World’s two biggest economies finally began when Washington put tariffs on Chinese goods starting 12.01 a.m., Washington D.C. time (0401 GMT) on Friday.
As a result, China assured that it will impose tariffs on 545 U.S. goods in response. In fact, major Chinese ports have been reported to have delayed clearing goods from United States. Beijing has further threatened to put a 25% tariff on U.S crude imports, but has kept the introduction date unannounced. This is expected to make U.S oil uncompetitive in China, since American crude shipments to China are worth $1 billion per month.
An executive from China’s Dongming Petrochemical Group said expects Beijing to soon impose the tariff on U.S. oil imports. He further added that his refinery had canceled U.S. crude orders and would switch to Middle East or West African supplies instead.