Investing.com - Oil prices inched back up on Monday morning in Asia after a drop last Friday amid rising fears of an intensifying trade war between the world’s two biggest economies.
Crude Oil WTI Futures for May delivery were trading at $62.27 a barrel in Asia at 11:00PM ET (03:00 GMT), up 0.34%. Brent crude futures for June delivery, traded in London, were up 0.40% at $67.38 per barrel.
Concerns of an intensifying trade dispute between the U.S. and China have been weighing on oil markets, with U.S. President Donald Trump threatening to impose new tariffs on China. On Thursday, he said he had ordered U.S. trade officials to consider an additional $100 billion in tariffs on China.
Meanwhile, China has increased tariffs by up to 25% on 128 U.S. products.
Chinese markets were closed last Thursday and Friday due to public holidays. Shanghai Crude Oil WTI Futures played catch up on Monday, dropping 0.57% at 11:00PM ET (03:00 GMT) to 400.00 yuan ($63.40) per barrel for September delivery.
Escalating tensions between the U.S. and China could hurt global growth. There are also fears that China, if pushed hard enough, would impose a tax on U.S. oil imported into China.
Oil servicing companies, which have only recently started recovering from years of crisis as the industry deferred spending on new production due to low prices, would be hit particularly hard.
China has also taken its first steps towards paying for imported crude oil in yuan instead of the U.S. dollar.
As the biggest importer of crude oil and the world’s largest energy consumer, China’s oil demand is a key determinant of global oil prices. The yuan-denominated oil futures are also expected to give China more power in pricing crude sold to Asia.
In the U.S., drillers added 11 rigs looking for new production in the week to April 6, bringing the total count to 808, the highest level since March 2015. This indicates more U.S. crude output to come.
Overall, oil prices remain supported by healthy demand and the supply restraint led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia.