Oil prices fall

LONDON. Oil fell yesterday as financial markets slid after a free trade advocate in the US government resigned, feeding concerns that Washington’s plans for import tariffs could spark a trade war.

Rising US crude output and climbing US inventories have also weighed. The United States is set to become the world’s biggest oil producer this year, threatening to offset supply cuts by the OPEC, Russia and other producers.

“Rising US oil output coupled with a simultaneous upswing in domestic oil stockpiles has all the makings for a potent bearish cocktail,” PVM Oil Associates strategist Stephen Brennock said.

Brent futures slipped 32 cents to $64.47 a barrel by 1232 GMT, while US crude futures fell 33 cents to $62,27, although both contracts had eased off their lows in line with a recovery in S&P futures.

The oil price fall followed weakness in global financial markets after the resignation of Gary Cohn, economic adviser to US President Donald Trump, seen as a bulwark against protectionist forces in the government.

Oil’s correlation with the equity market has been positive, meaning the two tend to move in tandem, for at least a month, the longest such stretch in a year.

“With the announcement that Cohn was resigning, the S&P futures market dropped and oil went with it,” Petromatrix strategist Olivier Jakob said.

Reuters.