Oil prices slide as US-China trade war heats up
Despite OPEC production cuts and tensions in the Middle East providing support to oil prices in recent weeks, investors’ concern over the US-China trade spat were enough to send the commodity lower on Wednesday.
Oil prices took a major tumble on Wednesday after Chinese officials said they were prepared to restrict rare earth minerals as the country’s trade war with the US ramps up, leading to investors growing increasingly concerned about how the spat will impact crude demand.
Front-month Brent futures hit $68.68 a barrel at 13:45 GMT, down $1.43 from the previous close, after hitting a session low of $68.08. Meanwhile, US West Texas Intermediate (WTI) futures came in at $57.57 a barrel, representing $1.57 decline, after hitting a low of $57.14 a barrel.
US-China trade fears outweigh OPEC supply cuts
OPEC-led production cuts that took effect in January and ongoing political turmoil in the Middle East have provided significant support to oil prices in since the start of the year.
However, investors fear over the impact of worsening trade relations between the world’s two largest economies outweighed oversupply disruptions.
China prepared to play earth metals trump card
The latest cause of concern for investors in the escalating trade war between the US and China came when Chinese officials signalled that they were prepared to restrict exports of rare earth metals, with the country controlling a dominate position in that market.
‘China is the world’s biggest producer of these highly-prized raw materials and is poised to use them as leverage in its trade spat with Washington,’ London brokerage PVM told Reuters.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.
Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
European Central Bank meeting
Learn about how the ECB meeting affects interest rates and price stability ahead of the next announcement.
- How might the next meeting affect the markets?
- What are the key rate decisions to watch?
- Why is the Governing Council announcement important for traders?
Live prices on most popular markets
- Forex
- Shares
- Indices
See more forex live prices
See more shares live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
See more indices live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.
