Oil prices weakened on Monday after the United States and China began to impose new import tariffs on each other, raising concerns that this would further hit global economic growth and oil demand.
Brent crude oil futures closed down $0.59 at $58.66 a barrel, down to $58.10. West Texas Intermediate Oil (WTI) futures fell $0.33 to $54.77 a barrel. Trading was quiet because the United States was on Labor Day.
On Sunday, the United States began imposing a 15% tariff on some Chinese imports, including shoes, smart watches and flat-panel televisions. China also imposed a new tariff on American crude oil. The Sino-US trade war has escalated again.
U.S. President Trump tweeted that talks between the two sides would continue this month, saying his goal was to reduce U.S. dependence on China. He also reiterated his call for U.S. companies to find alternative suppliers outside China.
"Even if President Trump indicates that the established US-China negotiations will continue, the market has become increasingly resigned to the deadlock for a long time and will expect the central bank to introduce easing measures to boost risk appetite," said Harry Tchilinguirian of BNP Paribas.
This is the first time in more than a year since the US-China trade war that China has imposed tariffs on US crude oil at a rate of 5%.
The Organization of Petroleum Exporting Countries (OPEC) saw its first increase in oil production in August this year, as supplies from Iraq and Nigeria increased, overcoming production restrictions imposed by Saudi Arabia, the largest exporter, and the decline in Iran's production as a result of sanctions.
In the United States, Hurricane Dorian is expected to sweep across Florida's Atlantic coast from Monday to Wednesday and then northward to Georgia and Carolina. The National Hurricane Center does not believe that the hurricane will make direct landfall.
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