U.S. oil gauge drops, while Brent crude rallies
The U.S. oil benchmark fell while a global crude gauge rose Monday, as investors assessed escalating trade tensions and braced for a potential output boost.
July West Texas Intermediate crude CLN8, -0.32% lost 35 cents, or 0.5%, to $64.71 a barrel, but August Brent crude LCOQ8, +0.93% tacked on 56 cents, or 0.8%, to $74 a barrel.
On Friday, both WTI and Brent notched big drops for the session and the week, weighed by expectations that the Organization of the Petroleum Exporting Countries and its allies will agree to increase production at a meeting this Friday. WTI saw its lowest settlement since June 6, and Brent, its lowest since May 2.
Investors also remain fixated on how trade-related disagreements between the U.S. and China are escalating. President Donald Trump on Friday announced tariffs on $50 billion worth of Chinese imports, and Beijing retaliated by targeting high-value American exports.
“China appears to be considering import tariffs on U.S. crude oil,” said Commerzbank analysts in a note Monday.
“The possible punitive tariff of 25% means that U.S. crude oil would no longer be a low-cost alternative despite the current price discount,” they wrote, adding that they “therefore expect the high price gap between Brent and WTI to remain in place during the summer months.”
Victor Reklaitis is a London-based markets writer for MarketWatch. Follow him on Twitter @VicRek.
We Want to Hear from You
Join the conversation
Commodity Futures Trading Commission