Donald Trump helped oil and gold jump on Friday with his latest inflammatory move in his trade war with China.
US and global oil futures climbed and partially reversed Thursday’s big plunge that saw the US West Texas Intermedia (WTI) benchmark suffer its biggest one-day fall in more than four years after President Donald Trump moved to impose additional import tariffs on Chinese goods from September 1.
Trump’s tweets lifted tensions surrounding his trade war with China, stoked fears about global energy demand and rattled global markets – especially bonds, shares and commodities on Friday.
“Unlike in previous tariff rounds, the goods that will be affected by the 10% tariff mainly include finished goods, meaning that the impact on U.S. consumers will be more direct than it has been thus far,” Cailin Birch, global economist at The Economist Intelligence Unit, wrote in emailed comments to Marketwatch.com
“This darkens the outlook for economic growth in both the U.S. and in China, and therefore global oil demand.”
West Texas Intermediate crude for September delivery surged $US1.71, or 3.2%, to settle at $US55.66 a barrel in New York, recovering part of the hefty 7.9% drop on Thursday.
The front-month (September) contract still suffered a 1% weekly loss.
In Europe, October Brent crude, the global benchmark, jumped $US1.39, or 2.3%, to $US61.89, following Thursday’s 7% slide.
Brent ended 2.3% lower for the week.
Figures from oil services group, Baker Hughes revealed a fifth straight weekly fall in the number of US rigs drilling for oil. Baker Hughes said the number of active US oil rigs fell 6 to 770 last week.
The US Energy Information Administration reported a drop in US oil stocks to 436.5 million barrels (a fall of 8.5 million barrels). US weekly production remained around 12.2 million barrels.
Meanwhile, gold’s ‘safe haven’ appeal returned in force last Thursday and Friday.
Friday saw Comex gold hit its highest finish in more than six years, a day after Trump’s inflammatory intensification of his trade fight with China by announcing additional tariffs on $US300 million of Chinese imports.
Gold for December surged rose $US25.10, or 1.8%, to settle at $US1,457.50 an ounce—the highest most-active contract finish since May 9, 2013, according to FactSet.
Prices rose 2.7% over the week.
Comex September silver rose 9 cents, or 0.6%, to $US16.27 an ounce, though still lost of 0.8% for the week.
Comex September copper fell 9.4 cents, or 3.5%, to $US2.5715 a pound, ending 4.2% lower for the week (See separate story).
