Crude oil prices began Wednesday with a nearly 1 percent slide, as trade scepticism between Washington and China caused a plunge in the stock markets of major economies around the world.
U.S. and China called for a 90-day truce to their trade dispute earlier this week, but U.S. President Donald Trump’s comments on Tuesday once again heated up relations between the world’s two biggest economies.
“We are either going to have a REAL DEAL with China, or no deal at all – at which point we will be charging major Tariffs against Chinese product being shipped into the United States,” he wrote on social media.
International benchmark Brent crude was trading at $61.16 per barrel on Wednesday at 0630 GMT with a 0.22 percent decline, after it closed Tuesday at $61.30 a barrel.
American benchmark West Texas Intermediate was at $52.48 a barrel at the same time for a 0.56 percent loss, ending Tuesday at $52.78 per barrel.
With scepticism back on track for investors amid a potential global economic slowdown, the stock markets of major economies posted substantial losses on Tuesday.
The major indexes in the New York Stock Exchange ended Tuesday with more than a 3 percent decline. The Dow Jones was down 799 points, while the S&P 500 fell 90 points. The Nasdaq also posted a 283 point loss.
The stock markets in Germany and France were down 1.14 percent and 0.82 percent, respectively. The U.K. saw a 0.56 percent decline, while Italy posted a 1.37 percent loss.
If the U.S. and China continue imposing tariffs against each other, it is expected that these will hit these countries’ automotive and technology sectors, and could easily create a ripple effect extending to their supply chains on emerging economies in the Americas and Asia.
An economic downturn would hurt global oil demand, and could push crude prices lower.