Oil prices slump as China, U.S. trade tensions continue

Oil prices were lower on Friday, as geopolitical tensions continued between the U.S. and China.

Crude oil futures fell 0.38 percent to $63.30 a barrel by 8:36 GMT.

Brent crude futures, the benchmark for oil prices outside the U.S., was down 25 cents, or 0.37percent, to $68.08 a barrel, according to investing.com.

U.S. President Donald Trump threatened to impose new tariffs on China, prompting investor worry of a trade war between the two biggest countries in the world.

On Thursday Trump said he was asking the United States Trade Representative to consider $100 billion more in tariffs as a retaliation against China.

China announced two sets of tariffs this week in a tit-for-tat against technology, steel and aluminium tariffs imposed by Trump.

The decline in prices was offset by a fall in U.S. production last week, which eased investor concern of a supply glut.

Inventories of U.S. crude fell by 4.617 million barrels for the week ended March 30, confounding expectations for a rise of 1.4 million barrels, according to data from the Energy Information Agency (EIA) on Wednesday.

The price of oil has been stuck between the rise in U.S. shale and a deal from the Organization of the Petroleum Exporting Countries’ and Russia to curb production and end a global supply glut.

OPEC has been cutting crude output by 1.8 million barrels per day (bpd) to prop up oil prices. The pact began in January 2017 and is set to expire at the end of 2018 but de-facto leader Saudi Arabia is pushing for the cuts to extend into 2019.

In an unusual move, Saudi Arabia announced on Thursday it would raise its official selling price for May crude sold to Asia. Traders had expected a cut of between 50 cents to 60 cents a barrel according to a Reuters survey.

In another energy trading, Gasoline RBOB Futures decreased 0.58% at $1.9744 a gallon, while heating oil fell 0.45% to $1.9676 a gallon. Natural gas futures rose 0.82% to $2.697 per million British thermal units.