Oil prices plummeted on Thursday, joining global sell-offs in equities, as the escalating U.S.-China trade war came into the spotlight again, dampening the outlook for economic and oil demand growth a day after the EIA reported further increases in US stockpiles of crude.
WTI Crude plunged below the $60 a barrel handle for the first time since the end of March, and Brent Crude prices dipped below $70 per barrel for the first time since early April.
As of 11:25 a.m. EDT on Thursday, WTI Crude was plunging more than 5 percent-by 5.26% at $58.19, while Brent Crude was tumbling 4.45% at $67.83.
Both WTI and Brent are today on track for their worst daily and weekly drops in six months.
The oil and stock markets were hard hit on Thursday by the increased tension in the U.S.-China trade war, which has investors increasingly worried about the state of the global economy and, by extension, the outlook for global oil demand growth for the rest of the year.
After weeks of fruitless negotiations and more tariffs and retaliatory tariffs that the world's two biggest economies slapped on each other, China said today that the talks about resolving the trade dispute can't resume until the U.S. addresses its 'wrong actions.'
"If the U.S. would like to keep on negotiating it should, with sincerity, adjust its wrong actions. Only then can talks continue," CNBC quoted Gao Feng, spokesperson at the Chinese Ministry of Commerce, as saying on Thursday.
The U.S. manufacturing growth figure for May, which showed the weakest pace of growth in almost a decade, further dampened sentiment in the markets, and the Dow tumbled by nearly 400 points.
Oil prices were battered by the clouded outlook on the global economy and oil demand, on top of yesterday's bearish EIA inventory report, which showed a crude oil inventory build of 4.7 million barrels in the week to May 17.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More