Oil prices fell from four-year highs on Tuesday as U.S.-China trade tensions coupled with increasing uncertainty over Italy’s finances reignited concerns about global trade in general.
The downside, however, remained limited as investors brace for U.S. sanctions on Iranian crude oil that go into effect next month.
Global benchmark Brent crude oil was down 48 cents or 0.60 percent at $84.48 per barrel after hitting as high as $85.45 in the previous session, the highest level since November 2014.
U.S. West Texas Intermediate (WTI) crude futures were marginally lower at $75.25 a barrel.
With the initial euphoria over the North American free trade deal fading, investors have shifted their focus back to heightened U.S.-China tensions over a broad range of issues.
As both the United States and China dig in on their trade dispute, some analysts believe the tensions would curb consumer purchasing power, crimp productivity growth and limit global economic expansion.
China has reportedly called off security talks with the U.S., the latest in a string of warning signs that the bilateral relationship is deteriorating.