Bloomberg) — Oil dipped below $69 a barrel as heightened trade tensions between the world’s biggest economies stoked fears over economic growth and energy demand.
Futures in New York dropped as much as 0.6 percent. U.S. President Donald Trump announced that he will impose a 10 percent tariff on about $200 billion in imports from China next week, and more than double the rate in 2019. That overshadowed lingering global supply risks as Iranian oil exports plunged to a 2 1/2-year low while analysts forecast U.S. crude inventories to have declined for a fifth week.
Oil has climbed more than 5 percent from the lows of August as looming U.S. sanctions on Iran start removing barrels, with buyers shunning imports from the Islamic republic before a November deadline. Still, the U.S.-China trade dispute is clouding the outlook for demand, and investors are closely watching whether OPEC and its allies will increase output when they meet to discuss strategy in Algeria on Sept. 23.
“Discussions around global demand in the wake of this morning’s tariffs and speculation of further OPEC supply increases should temper upside ambitions,” said Stephen Innes, Singapore-based head of trading for Asia Pacific at Oanda Corp. At the meeting in Algiers, members will be “most likely to discuss the supply disruption from Iranian sanctions, which is leading to speculation that further production increases will be presented at the meeting.”
