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Oil falls as US, China add more tariffs in trade war

Oil falls as US, China add more tariffs in trade war

Oil prices weakened this morning after new tariffs imposed by the US and China came into force, raising concerns about a further hit to global growth and demand for crude.

Brent crude slipped 22 cents, or 0.4%, to $59.03 a barrel this morning, while US oil was down two cents at $55.083 at barrel.

The US began imposing 15% tariffs on a variety of Chinese goods yesterday – including footwear, smart watches and flat-panel televisions – as China put new duties on US crude, the latest escalation in a bruising trade war.

US President Donald Trump said both sides would still meet for talks later this month.

Trump, writing on Twitter, said his goal was to reduce US reliance on China and he again urged US companies to find alternate suppliers outside China.

Beijing’s levy of 5% on US crude marks the first time the fuel had been targeted since the world’s two largest economies started their trade war more than a year ago.

Elsewhere, oil output from members of the Organisation of the Petroleum Exporting Countries rose in August for the first month this year as higher supply from Iraq and Nigeria outweighed restraint by top exporter Saudi Arabia and losses caused by US sanctions on Iran, a Reuters survey found.

In the US, energy companies cut drilling rigs for a ninth month in a row to the lowest level since January last year.

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