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West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $68.00 on Tuesday. The WTI price edges lower amid the fears that a Trump administration will spark a tariff-led trade war and concerns about demand growth in China.
Donald Trump’s US presidential election victory may continue to affect the WTI prices. Trump has announced his intention to impose a blanket tariff ranging from 10% to 20% on all imports and additional tariffs on up to 60% of products imported from China. A renewed trade war with China would also likely hurt economic growth in China, delaying any recovery in crude oil demand.
The firmer Greenback contributes to the WTI’s downside. Meanwhile, the US Dollar Index (DXY), a measure of the USD’s value relative to a basket of foreign currencies, climbs to fresh four-month peaks around 105.70. This makes USD-denominated Oil prices more expensive. However, the profit-taking in the Greenback might cap the downside for the black gold for the time being.
Beijing’s latest stimulus package, which was announced on Friday, fell short of market expectations. Additionally, data released on the weekend showed that Chinese consumer prices rose at the slowest pace in four months in October while producer price deflation deepened, raising concerns about demand growth in the world’s second-biggest oil consumer. More By This Author:USD/CHF Edges Higher Above 0.8700 Amid Renewed US Dollar Demand USD/CAD Holds Steady Above 1.3850 As Fed Cuts Its Rates, Eyes On Canadian Employment Report USD/CHF Drifts Lower To Near 0.8750, Fed Rate Decision Looms
