Oil plunges as trade war rages

Oil prices were reduced to several weeks low early on Tuesday, the first full trading day after the new US and Chinese tariffs and counter-tariffs came into force, and signs emerged that both OPEC and its key partner in the production cut deal, Russia , oil production increased in August.

As of 11:06 AM EDT on Tuesday, WTI Crude was down 3.23 percent at $ 53.23 and Brent Crude had fallen below $ 58 a barrel – to $ 57.59, down 1.82 percent on the day.

Market participants were once again concerned about the effects of the US-China trade war on global economies and oil demand growth. On Sunday, September 1, the United States imposed tariffs on Chinese goods, and China imposed tariffs on some US goods, although Beijing imposed most of the December tariffs with new tariffs.

On the demand side, the market is concerned about slowing down economies and, by extension, reducing oil demand growth. Also on the supply side, it is buoyed by bearish factors.

According to a Reuters survey, OPEC's crude oil production increased in August, thanks to Iraq and Nigeria. OPEC's August production is estimated at 29.61[ads1] million barrels per day, which is 80,000 barrels per day over July's production level. Although Saudi Arabia is still delivering its share of cuts, it lifted production in August to produce 9.63 million barrels per day.

In Russia, OPEC's main partner in the OPEC + coalition reducing production to support oil prices, oil production increased to 11.29 bpd in August, up from 11.15 bpd in July, exceeding Russia's ceiling under the agreement. Rosneft increased its oil production by 5 percent last month compared to last month, according to Russia's Ministry of Energy data cited by Reuters.

Nevertheless, Russian Energy Minister Alexander Novak confirmed that Russia still wants to keep its share of the cuts.

By Tsvetana Paraskova for

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