Oil rebounds after 7% plunge on Trump tariffs

Multinational

LONDON, August 2, 2019 – Oil prices rebounded on Friday in Asia after plunging more than 7% on US Donald Trumps’ overnight tweet for more tariffs on Chinese goods. 

US Crude Oil WTI Futures rose 2% to $55.05 by 12:30 AM ET (04:30 GMT). International Brent Oil Futures gained 2.5% to $62.02. 

Overnight, Trump said his administration will on Sept. 1 be putting a “small additional tariff of 10%” on the remaining $300 billion of goods and products coming in from China. 

“This does not include the 250 Billion Dollars already Tariffed at 25%,” the president added in his tweet. 

His tweet sent shockwaves to global stock markets, while oil prices plunged almost 7% after the news. It was their biggest falls in more than four years. 

Oil prices were already down more than 3% before Trump’s announcement. Federal Reserve Chairman Jerome Powell’s comments that the rate cut announced on Thursday was ‘essentially in the nature of a mid-cycle adjustment to policy’ disappointed traders who were expecting a more aggressive rate-cutting posture. 

“While the Fed did everything the market was expecting it to, the reality is that the way the market reacted after Federal Reserve Chairman Jerome Powell spoke, it seems it wanted more,” said Phil Flynn, senior market analyst for energy at the Price Futures Group in Chicago.