Oil prices such as Brent and WTI crude oil dropped on Monday as concerns of a looming trade dispute between the United States and China weighed on global markets.
U.S. West Texas Intermediate (WTI) crude futures were at $65.49 a barrel at 0543 GMT, down 39 cents, or 0.6 percent, from their previous close. Brent crude futures were at $70.18 per barrel, down 27 cents, or 0.4 percent.
In other energy trading, gasoline futures slipped 0.2% to $2.038 a gallon, while heating oil held steady at $2.022 a gallon. Natural gas futures ticked down 1.1 cents, or 0.4%, to $2.623 per million British thermal units.
In Asia, Shanghai crude oil futures started off strongly, both in volume and prices, with front-month contracts soaring as much as 6 percent as investors bought into the world’s newest financial oil trading instrument.
However, looming over oil markets was the possibility of a full-blown trade war between the United States and China battered Asian shares on Monday. The drop all came after U.S. President Donald Trump last week signed a memorandum that could impose tariffs on up to $60 billion of imports from China.
New Oil Futures
Financial oil markets have long been taken over by Europe’s Brent and America’s WTI.
Asia, despite being the world’s biggest and fastest-growing oil consumer has so far not had a benchmark but that could possibly change as China launched the Shanghai crude oil futures.
The number of oil drilling rigs rose by four to 804 last week, General Electric’s Baker Hughes energy services firm said in its closely followed report on Friday.
The U.S. rig count, an early indicator of future output, is much higher than a year ago as energy companies have continued to boost spending since mid-2016 when crude prices began recovering from a two-year crash.
U.S. oil production, driven by shale extraction, rose to an all-time high of 10.40 million barrels per day (bpd) last week, staying above Saudi Arabia’s output levels and within reach of Russia, the world’s biggest crude producer.
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