Oil Prices Weaken as the U.S.-China Phase One Deal Arises

In recent times, oil prices plunged based on fears that the pending Phase 1 trade deal between the United States and China may perhaps not push demand.

Moreover, the U.S. intends to maintain tariffs on Chinese goods until the second phase.

In a statement, U.S. Treasury Secretary Steven Mnuchin said last Tuesday that tariffs on Chinese goods would remain.

The extension is until they finalized the second phase of a U.S.-China trade agreement. Both sides would sign up for an interim agreement later on Wednesday.

After that, Brent crude tumbled by 16 cents or 0.3%, at $64.33 a barrel.

U.S. West Texas Intermediate crude futures were also below 15 cents or 0.03%, at $58.08 per barrel.

Analyst Edward Moya indicated, “A pickup with global demand for crude may struggle as U.S.-Chinese tensions linger after some hardline stances from the Trump administration.”

Moya further explained that financial markets became upset due to Trump’s administration, suggesting that tariffs will remain in place until the 2020 U.S. presidential elections wrap up.

To add, it will hinge on if China will come through on their pledges with the phase-one deal.