1 month ago
Commodities

Oil Prices Slump on U.S.-China Trade Doubts, Dollar Strength

Investing.com - Oil prices slumped as a White House economic adviser warned that there was still a lot of work

Investing.com - Oil prices slumped as a White House economic adviser warned that there was still a lot of work left in order to sort out the trade dispute between the U.S. and China and a stronger U.S. dollar also weighed on the commodity.

New York-traded West Texas Intermediate crude futures tumbled $1.63, or 2.95%, at $53.63 a barrel by 10:17 AM ET (15:17 GMT).

Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., slid $1.14, or 1.82%, to $61.61.

Crude prices had hit their best level of the year earlier Monday on signs that U.S. sanctions on Venezuelan exports had helped tighten supply, while data showed that the number of oil rigs operating in the U.S. hit an eight-month low and optimism that the OPEC-led effort to reduce output would help temper the global supply glut supported prices.

But White House economic adviser Kevin Hassett dampened optimism over the trade talks between Washington and Beijing as he told CNBC that the amount of progress ahead of the March 1 deadline remained to be seen and added that “there’s still a lot of work to do.”

Recent Chinese economic data has revealed signs of a slowdown in the world’s second-largest economy as uncertainty over trade negotiations hampered activity. China is also the world’s largest importer of oil and economic weakness entails lower demand for crude.

Adding to downward pressure on oil, the U.S. dollar strengthened against major rivals on Monday, recovering levels lost last week after Federal Reserve Chairman Jerome Powell emphasized that the central bank would be patient on its path to further policy tightening.

A stronger greenback makes the dollar-denominated commodity more expensive for holders of foreign currencies.

In other energy trading, gasoline futures fell 1.75% to $1.4117 a gallon by 10:19 AM ET (15:19 GMT), while heating oil lost 1.21% to $1.8896 a gallon.

Lastly, natural gas futures tumbled 2.71% to $2.660 per million British thermal units.