Oil prices fell more than $2 per barrel on Thursday, wiping away the prior session’s rally, as investors reassessed the details of a planned pause in sweeping U.S. tariffs and focus shifted to a deepening trade war between Washington and Beijing.
U.S. West Texas Intermediate crude futures fell $2.22, or 3.6%, to $60.13 per barrel by 11:46 a.m. EDT (1546 GMT). Brent crude futures fell $2.04, or 3.1%, to $63.44 a barrel.
Both contracts had gained more than $2 a barrel on Wednesday after U.S. President Donald Trump paused the heavy tariffs he had announced against dozens of U.S. trading partners a week ago, marking an abrupt U-turn less than 24 hours after the levies took effect.
Oil prices plummet on China’s retaliation against US tariffs
At the same time, however, Trump also raised tariffs against China. U.S. tariffs on Chinese imports now total 145%, the White House told media on Thursday.
China also announced an additional import levy on U.S. goods, imposing an 84% tariff last Thursday.
Higher tariffs against China are likely to cut U.S. crude exports to the country, backing up supply and raising U.S. storage levels, trading advisory firm Ritterbusch and Associates told clients on Thursday.
U.S. crude oil exports to China fell to 112,000-barrels-per-day (bpd) in March, nearly half of last year’s 190,000 bpd, data from vessel tracker Kpler showed.
U.S. crude oil stockpiles rose by 2.6 million barrels last week, government data showed on Wednesday, almost double the 1.4-million-barrel increase analysts projected in a Reuters poll.
Macquarie analysts on Thursday said they expect another build this week.
The U.S. is also moving ahead with a 10% levy on all of its imports. Analysts and economists have warned that the tariffs could slow global trade, denting economic activity and oil demand.
“The tariff-driven expectation of reduced demand amid the continued possibility of a U.S. recession will remain front and center of trader concerns in likely keeping a lid on near term price gains,” Ritterbusch and Associates said.
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