Crude oil seen weaker on demand concerns

U.S. two-dollar billsPhoto by Leslie Shaffer

Crude oil prices are seen weaker on Monday in Asia as demand concerns come to the forefront on an expected move by the U.S. to impose fresh tariffs on Chinese imports.

ICE Brent crude oil settled up 33 cents to US$76.83 a barrel, down 0.8 percent on week, while NYMEX West Texas Intermediate ended down 2 cents to US$67.75 a barrel, a decline of nearly 3 percent.

The Trump administration is gearing up to impose tariffs on US$200 billion in Chinese goods and may move to do so this week.

“The US$200 billion we are talking about could take place very soon depending on what happens with them,” Trump said on Air Force One as he traveled from Montana to South Dakota.

“To a certain extent it’s going to be up to China. And I hate to say this, but behind that is another US$267 (billion) ready to go on short notice if I want. That changes the equation.”

The U.S. and China have already applied tariffs to US$50 billion of each other’s goods. The move may decrease overall demand by China, the world’s top crude importer, if the economy slows down as a result of the trade spat.

Looking ahead, the Paris-based Irnternational Energy Agency releases its monthly figures Thursday on global oil supply and demand.

Last week, bullish bets on crude futures and options in London and new York rose by 16,634 contracts to 386,487, the U.S. Commodity Futures Trading Commission said Friday. ICE Brent crude net long positions jumped by 27,676 contracts to 416,742, the highest in nearly two months.

Rigs drilling for oil in the U.S. fell by two last week to 860, Baker Hughes said on Friday, as activity has stagnated over the past three months along with crude prices.