Oil prices fell more than 1% on Tuesday, with Brent crude settling near seven-month lows below $60 a barrel as trade tensions between the U.S. and China intensified worries about weakening global demand.
During the session, Brent traded at a low of $58.81 a barrel, down more than 22% from its peak in April. That decline puts the global benchmark in “bear market” territory.
Brent prices have lost more than 9% in the past week, with U.S. President Donald Trump vowing to impose new tariffs on Chinese imports and Beijing making further moves against U.S. agricultural cargoes.
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The United States also responded to a decline in China’s Yuan on Monday by branding China a currency manipulator. Trump on Tuesday dismissed concerns over a protracted trade war with China, as Beijing warned that Washington’s decision the day before would lead to chaos in financial markets.
West Texas Intermediate crude futures were down $1.06, or 1.94%, at $53.63 a barrel.
International benchmark Brent futures fell 87 cents, or 1.45%, to settle at $58.94 a barrel.
Global equities hit a two-month low and Brent fell more than 3% on Monday as traders worried the dispute between the world’s two biggest oil buyers would dent demand, helping to prompt Tuesday’s short-covering.
Oil prices found little encouragement as the U.S. government forecast that growth in the Permian Basin and other shale formations would largely offset production losses from the Gulf of Mexico due to Hurricane Barry.
Crude could still find some support after the market settles on Tuesday, with a Reuters poll showing U.S. crude oil inventories were expected to have fallen for an eighth consecutive week.
