- Trump administration’s tariffs on various Chinese imports go into effect.
- China introduces new tariffs on US crude oil imports.
- Market reaction stays limited amid thin trading volumes.
Crude oil came under modest selling pressure on Monday with investors shifting their focus, once again, to the US-China trade dispute. However, the fact that the US and Canada markets stayed closed due to the Labor Day holiday on Monday caused the trading volume to remain thin and helped crude oil limit its losses. As of writing, the barrel of West Texas Intermediate was trading at $54.75, erasing 0.45% on a daily basis.
US-China trade fears return
Despite calls from both sides to resolve the US-China trade conflict through “calm negotiations” last week, the Trump administration’s 15% tariffs on a variety of Chinese imports went into effect on Monday. In response, the Chinese Commerce Ministry filed a complaint to the World Trade Organization over the import duties.
Commenting on this development, “Even as President Trump has indicated that scheduled talks between the U.S. and China are still to proceed, the market is more and more resigned to a protracted standoff between the two countries and will be looking towards central bank easing to shore up risk appetite,” BNP Paribas’ Harry Tchilinguirian said, per Reuters.
Further escalating the tension, China started imposing 5% tariffs on US crude oil imports for the first time since the beginning of the trade war.
Major developments surrounding the trade conflict are likely to continue to drive crude oil prices in the next couple of days. Due to today’s holiday, the Energy Information Administration will be releasing its weekly crude oil stock report on Thursday rather than the usual Wednesday.
Technical levels to watch for
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