Oil prices slid on Monday morning in Asia as reports over the weekend indicated that the US prepared to impose new tariffs on $200 billion worth of Chinese exports. This was a decision that offset fears of supply constraints caused by Washington’s sanctions against Iran.
Crude Oil WTI Futures for delivery in November slipped 0.07 percent to $68.72, while Brent Oil Futures for delivery also inched down 0.01 percent to $78.08.
US President Donald Trump is prepared to impose a new round of tariffs on $200 billion worth of Chinese goods as early as today, a senior administration official said. The new tariffs may be set at 10 percent, lower than the original figure of 25 percent floated by the administration in the past.
The decision came after the end of a public comment consultation on the new round of tariffs earlier this month. Trump warned that he would put tariffs on practically all Chinese products and dampened expectations about the impact of trade talks with Beijing.
Meanwhile, traders are also deeply focused on the US crude sanctions on Iran. The sanctions are set to take effect in November. The country’s oil exports are lower near a third since the sanctions were announced in April. They slipped 2 million barrels a day in August and continued to fall during the first half of September.
“The market’s expectation of shortages has cooled after data from last week showed increases in supplies, while investors have lowered the outlook for oil demand,” stated Wang Xiao, who is the head of crude research at Guotai Junan Futures.
Iran stated on the weekend that Saudi Arabia and Russia have taken the oil market “hostage” as Washington is aiming to impose new sanctions on Iran’s oil sales. The US also encouraged oil producers to pump more oil to offset the shortfall from Iran.
“Russia and Saudi Arabia claim to seek to balance the global oil market, but they are trying to take over a part of Iran’s share. Trump’s efforts to cut Iran’s access to the global crude market have prompted Russia and Saudi Arabia to take the market hostage,” stated Hossein Kazempour Ardebili, who is Iran’s OPEC governor.
Meanwhile, the gold and the US dollar similarly slumped on as the US prepares to pound China with more tariffs on imports.
Gold futures for delivery in December were lower 0.14 percent to $1,199.4 per troy ounce on the Comex division of the New York Mercantile Exchange.
The US dollar index, which gauges the greenback against a basket of other currencies, traded 0.04 percent lower to 94.47.