Oil extends weekly loss as Trump urges new U.S. tariffs on China

Futures in New York dropped as much as 1.1%, heading for a weekly loss of 2.8%. Trump said he has instructed the U.S. Trade Representative to consider imposing levies on an additional $100 billion in Chinese imports. The move came a day after both the U.S. and China officials indicated they are willing to negotiate on frictions.

Oil is struggling to recover the highs of January as investors fear a trade war between the world’s two biggest economies would hinder economic growth. While China on Wednesday took aim at America’s rural heartland by proposing levies on politically sensitive farm commodities such as soybeans, the list also included petrochemicals and liquefied propane indicating that the world’s biggest oil buyer is willing to use energy as a weapon to retaliate.

West Texas Intermediate for May delivery dropped as much as 72 cents to $62.82/bbl on the New York Mercantile Exchange, and traded at $63.14 at 9:33 a.m. in Tokyo. The contract climbed 17 cents to $63.54 on Thursday. Total volume traded was about 13% above the 100-day average.

Brent for June settlement lost as much as 43 cents, or 0.6%, to $67.90/bbl on the London-based ICE Futures Europe exchange. The contract is down 3.3% this week. The global benchmark crude traded at a $4.84 premium to June WTI.