Crude oil prices started Tuesday on a higher note, but retreated from previous day’s high levels, amid the escalation in Sino-U.S. trade tension casting a shadow on global oil demand.
International benchmark Brent crude was trading at $70.53 per barrel at 0632 GMT with a 0.8% gain after closing Monday at $69.96 a barrel.
American benchmark West Texas Intermediate (WTI) was at $61.23 a barrel at the same time, a 0.5% increase, after ending the previous session at $60.94 per barrel.
Brent oil climbed as high as $72.58 per barrel on Monday but lost around 2.8% of that at 0632 GMT on Tuesday, while WTI reached as much as $$63.30 a barrel on Monday but fell 3.3% from that level.
Global oil demand is under threat after the tension between the world’s two largest economies has kicked up a notch.
The escalation of U.S.-China trade tension point that global economic growth could be slower this year, and overall oil demand could fall around the world to bring oil prices down.
Following the increase in the rate of U.S. tariffs on $200 billion worth of Chinese imports to 25% from %10 on Friday, Beijing said it will raise tariffs on $60 billion of American goods in retaliation on June 1 to between 20% to 25%, from 5% to 10%.
Just before China’s action, Trump was forcing Beijing to make a deal on Monday, as he said via social media “China will be hurt very badly if you don’t make a deal,” and added “China should not retaliate-will only get worse!”
U.S. Treasury Secretary Steven Mnuchin later said both countries are still at the phase of negotiating a deal, and the U.S. officials are working on a plan to visit to Beijing to resume the talks.