Oil prices fell on Tuesday morning as fears about the impact of a US-China trade war on demand for fuel persisted.
Brent crude futures dropped 1.5% to $63.84 a barrel, while US West Texas Intermediate (WTI) was down 1.4% to $61.18 a barrel.
US officials had struck a more positive tone on Monday about potential deals with trading partners, with Treasury secretary Scott Bessent saying that the administration had seen “many countries come forward and present some very good proposals”.
Read more: FTSE 100 LIVE: Stocks flat as former Bank of England governor Carney clinches Canada election victory
However, there was still uncertainty stemming from the trade spat between the US and China, as Bessent said he believed that it’s “up to China to de-escalate”.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “There’s a lack of clarity over how the China-US negotiations will unfold. It appears both sides are waiting for the other to take the initiative.”
“Amid the standoff, worries about the effect on global growth are lingering, and it’s showing up in oil prices, with brent crude falling back by around 1% as projections for energy demand are scaled back.”
While uncertainty remained over US-China trade tensions, gold prices dipped because of some of the more positive signals on tariffs.
Gold futures (GC=F) fell 0.5% to $3,330.20 per ounce at the time of writing, while the spot price declined 0.8% to $3,317.02 an ounce.
The White House said on Monday that Trump planned to ease the impact of tariffs on US carmakers.
“President Trump is building an important partnership with both the domestic automakers and our great American workers,” US commerce secretary Howard Lutnick said in a statement provided by the White House, according to a Reuters report.
Read more: HSBC profits drop less than expected as bank announces share buyback of up to $3bn
“This deal is a major victory for the president’s trade policy by rewarding companies who manufacture domestically, while providing runway to manufacturers who have expressed their commitment to invest in America and expand their domestic manufacturing.”
The statement came after a report by the Wall Street Journal said this meant that carmakers would not be charged other tariffs, such as duties on steel and aluminium.
Investors have been flocking to gold as it is considered a safe-haven asset in times of uncertainty. Despite edging lower on Tuesday morning, prices remain near all-time highs.
Story Continues
