LONDON: Oil prices slumped more than four per cent Thursday on growing trade tensions, which have deepened over the US blackballing Chinese telecom giant Huawei.
Around 1450 GMT, Brent crude was off $2.90 at 68.09 and WTI was down $3.15 at $58.27 — their lowest level in almost two months as demand took a hit.
The Chinese behemoth is reeling after US President Donald Trump effectively banned US companies from supplying the firm and its affiliates with critical components, citing security concerns, prompting a slew of tech firms to suspend transactions with Huawei and phase out using its equipment in network infrastructure.
“Oil prices remain under pressure, extending this week’s falls amid surging U.S crude inventories and weak demand from refineries,” said Oanda analyst Dean Popplewell, noting latest data showed crude oil inventories at a two-year high due to weak refinery demand.
“Crude ‘bears’ have been getting a helping hand from slowing demand growth due to the negative impact on the global economy of the Sino-U.S trade war,” added Popplewell.
By contrast, he said, “the crude ‘bull’ has been relying on escalating political tensions between the US and Iran, as well as ongoing supply cuts led by OPEC.”