By Adedapo Adesanya
Oil prices fell further on Thursday at the global market to extend losses brought about by comments from President Donald Trump which eased tension of the United States retaliating against Iran.
Brent crude, the international benchmark, which had dropped by over 3 percent at the previous session, further went down by 0.15 percent equivalent to 10 cents to trade at $65.34 per barrel. Also, the US West Texas Intermediate (WTI) crude further moved down below $60 by shedding 0.07 percent or 4 cents to close at $59.57 per barrel.
President Trump’s comment had eased the fear of a retaliation on Wednesday evening when he said that he would instead place additional economic sanctions on the country.
“Iran appears to be standing down, which is a good thing for all parties concerned and a very good thing for the world,” he said, confirming that no American was harmed when Iran launched over a dozen missiles targeted at the American soldiers in Iraq.
The action came hours after the late Iranian General Qasem Soleimani was buried on Tuesday. The commander of the elite Iranian force was killed by a military strike ordered by Mr Trump near Baghdad International Airport last Friday, raising tensions between both countries in the Middle East.
Also, pulling prices further down was the rise in US crude inventories which rose unexpectedly last week, with stockpiles climbing 1.2 million barrels to 431.1 million barrels.
Investors worry that further tension in the Middle East could disrupt crude supplies but the policy to reduce supply by 1.7 million barrels per day from the Organization of the Petroleum Exporting (OPEC) Countries continue to support prices.
On the US-China trade war front, which had affected oil prices for the past 18 months, both parties will meet next week, Wednesday, January 15, as Chinese negotiators will travel to Washington early next week to sign the phase-one trade deal with the United States government, China, Commerce Ministry confirmed on Thursday.
The trade deal would see China would greatly increase its purchases of US farm goods and other products, further open its financial sector, pledge not to devalue the Chinese Yuan to help the country’s exporters and better protect American intellectual property.
On America’s part, the Trump administration canceled new tariffs on roughly $156 billion that it planned to impose on Chinese products last month. It also agreed to cut in half the existing 15 percent tariff rate on roughly $120 billion of Chinese goods that had been imposed on September 2019.
Modupe Gbadeyanka