Crude oil prices declined on Thursday, extending previous session’s weakness, amid concerns the U.S.-China trade war could result in a drop in demand for crude.
On Wednesday, China slapped additional import tariffs of 25% on $16 billion worth of U.S. goods in retaliation for tariffs on China imposed by U.S. President Donald Trump.
Another factor set to weigh on global markets is the U.S.’ decision to impose new sanctions on Russia over the poisoning of former Russian spy Sergei Skripal. The sanctions would take effect around August 22.
Saying that its too early for possible retaliatory sanctions to be discussed, Russia reiterated it was not involved in the poisoning of the former spy.
Crude oil futures for September delivery ended down $0.13, or 0.2%, at $66.81 a barrel. On Wednesday, crude oil futures ended down $2.23, or 3.2%, at $66.94 a barrel, recording its biggest slide in over three weeks.
Crude oil prices edged higher earlier this week, amid rising concerns about global crude supply after U.S. reimposed sanctions on Iran. The first wave of sanctions against Iran came into effect at 12:01 on Tuesday.
U.S. said more sanctions targeting Iran’s oil sector and Central Bank will come into effect in November.
A notable drop in Saudi Arabia’s crude output last month and supply disruptions in Venezuela and Libya hurt as well.
Data released by the Energy Information Administration on Wednesday revealed U.S. crude stockpiles fell by 1.351 million barrels for the week ended August 3, as against a forecast for a drop of over 3 million barrels.
According to a report released by the American Petroleum Institute a day earlier, U.S. crude inventories dropped by 6.02 million barrels last week, much more than a 3 million barrels fall predicted by a survey by Bloomberg.