Oil prices fell on Monday, the compelling U.S. primitive to the lowest in two or more months since a ratcheting up of tensions from the U.S.-China war knocked confidence in the international market.
U.S. oil dropped $1, or 1.8 percent, to $53.17 a barrel, sooner falling to $52.96, the lowest since Aug. 9.
Oil costs are being struck”in substantial part due to concerns about a serious global economic downturn and possibly a U.S. downturn,” stated Stephen Innes, managing partner at Valour Markets.
Concerns about an economic downturn are being fanned by the intensifying trade warfare involving the USA and China.
China’s trade ministry said last week it might impose additional tariffs of 5 percent or 10 percent over a full of 5,078 products originating from the USA, such as crude petroleum, agricultural products like soybeans, and small aircraft.
In retaliation, President Donald Trump said that he had been ordering U.S. companies to examine ways to shut operations in China and create products in the USA.
U.S. Federal Reserve seat Jerome Powell told a yearly economic symposium in Jackson Hole, Wyoming the U.S. market is at a”favorable place” along with also the Federal Reserve will”behave as suitable” to maintain the present economic growth on track.”
But exacerbating concern over the potential for a downturn, U.S. manufacturing companies enrolled their initial month of regeneration in nearly a decade.
U.S. energy companies this week cut on the maximum oil rigs in roughly four weeks, together with the rig count falling into the bottom since January 2018, as manufacturers cut spending on new drilling and completions.
Hedge funds and other money managers increased their bullish wagers on U.S. primitive to some high in the most recent week, the U.S. Commodity Futures Trading Commission (CFTC) said.