Oil surged over 2% on Friday, bouncing from their most significant drops in years after President Donald Trump levied more tariffs on Chinese imports, escalating the trade war between the world’s two most prominent economies and crude consumers.
Brent crude futures sank over 7% on Thursday, their sheerest drop in more than three years. U.S. West Texas Intermediate (WTI) crude futures dropped nearly 8%, recording its worst day in more than four years,
The failure ended a fragile rally built on regular drawdowns in U.S. inventories, even as global demand looked uncertain due to the trade row.
Brent futures surged $1.51, or 2.5%, to $62.01 per barrel by 0407 GMT, while WTI futures gained $1.06, or 2%, to $55.01 per barrel.
Trump mentioned Thursday he would levy a 10% tariff on $300 billion of Chinese items from Sept. 1 and will raise taxes additionally if China’s President Xi Jinping does not move more quickly to strike a trade settlement.
The declaration extends Trump’s tariffs to nearly all of China’s imports into the USA and marks a vague end to a temporary break in a trade conflict that has disturbed global supply chains and irritated financial markets.
The U.S. economy expanded by 2.1% in Q2, government data confirmed on July 26, which beat economists’ forecast, although it was lower than Q1 growth.
Nonetheless, there are some indicators of the economic toll of the trade war between America and China, which this week posted slowing production activity in July.
The U.S. production operations also shifted in June, falling to a near three-year low, and construction spending dropped last month as funding in private development projects plunged to its lowest level in 1-1/2 years, data confirmed on Thursday.