Oil prices rebounded by around two per cent on Friday as they recovered some ground following the biggest falls in recent years on Thursday in the wake of US President Donald Trump imposing more tariffs on Chinese imports.
As the trade war intensified, the price of World Texas Intermediate and Brent Crude suffered its steepest drop in more than three years, with WTI plummeting by almost 8 per cent.
Trump said he would impose a further 10 per cent tariff on $300bn worth of Chinese imports from September and could raise them further if China’s President Xi Jinping fails to agree a trade deal quickly.
It extends tariffs to nearly all of China’s imports into the US and ends a temporary truce to the trade war that has disrupted financial markets.
On Friday, Brent futures had risen 2.2 per cent to $61.8 per barrel, and WTI crude had risen 1.9 per cent to $55.0 per barrel, as of 11am BST.
The hit to oil prices comes after the US economy expanded by 2.1 per cent in the second quarter – more than expected, amid concerns of a global economic slowdown.
Those fears will be reignited by the trade war’s resumption and the slowdown has resulted in falling demand for oil in the US.
The amount of crude process in the US averaged 17.2m barrels per day across the past four weeks, which is 1.3 per cent down from this time last year.