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Oil falls on trade fears after Trump's tariff threat

Reuters  |  TOKYO 

(Reuters) - prices fell on Wednesday, with Brent dropping by more than $1 at one point, after U.S. threatened to levy new trade tariffs on

The spectre of tariffs on a further $200 billion worth of Chinese goods sent commodities lower along with stock markets, as trade tensions between the world's two biggest economies intensified.

Brent crude futures were down 65 cents, or 0.8 percent, at $78.21 a barrel by 0627 GMT, having fallen to as low as $77.60. U.S. crude was down 43 cents, or 0.6 percent, at $73.68.

"The trade concerns have bitten today and the reason is that this is above and beyond what the market was expecting," said Michael McCarthy, at in

"Although there is a long deadline on this, if these tariffs are introduced there will be an impact on global growth and demand," McCarthy said.

The bearish mood was also fuelled by the would consider requests for waivers from sanctions due to snap back into place on Iranian crude exports.

will consider requests from some countries to be exempted from sanctions it will put into effect in November to prevent from exporting oil, U.S. said on Tuesday.

had earlier told countries they must halt all imports of Iranian from Nov. 4 or face U.S. financial measures, with no exemptions.

The U.S. pulled out of a multinational deal in May to lift sanctions against in return for curbs to its nuclear programme.

U.S. crude inventories fell last week by 6.8 million barrels, according to data from industry group, the

Analysts polled by forecast that crude stocks fell on average by 4.5 million barrels, ahead of government data at 10:30 a.m. EDT (1430 GMT) on Wednesday.

U.S. production is expected to average more than 12 million barrels per day late next year for the first time, the said in a monthly report on Tuesday.

(Reporting by Aaron Sheldrick; Editing by and Richard Pullin)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, July 11 2018. 12:10 IST