Crude oil prices were down early Thursday as the U.S. announced its intention to impose further tariffs on China, a move that is set to intensify tension between the world's two largest oil consumers.
International benchmark Brent crude was trading at $59.66 per barrel at 0644 GMT for a 0.35% decline after it closed Wednesday at $59.87 a barrel.
American benchmark West Texas Intermediate was at $55.63 a barrel at the same time, posting a 0.41% loss, after ending the previous session at $55.86 per barrel.
The U.S.’ Trade Representative stated Wednesday that the U.S. would increase tariffs from 10% to 15% on $300 billion worth of Chinese goods starting Sept. 1 echoing U.S. President Donald Trump's announcement last Friday.
In addition to the latest tariffs, Trump also said last Friday the U.S. would raise tariffs on another $250 billion worth of Chinese goods to 30%, from the previous rate of 25%, starting Oct. 1.
Yet on Monday, Trump gave positive signals over trade relations between the U.S. and China and told reporters at the G7 summit in France that Washington and Beijing would restart trade talks.
While raising tariffs weakens global oil demand estimates and pushes oil prices lower, the new record high U.S. oil production of 12.5 million barrels per day for the week ending Aug. 23 also played a role in placing downward pressure on prices while ensuring the U.S. holds onto its title as the world's top producer.
The last time the U.S.' crude oil production reached a record high level was seen in the week ending May 31 when output reached 12.4 million bpd, according to data from the Energy Information Administration (EIA).
By Ovunc Kutlu