Fundamental Comment

Oil fluctuates amid supply concerns, US-China dispute

Oil fluctuates amid supply concerns, US-China dispute

Oil prices fell during Monday’s trading, with concerns about the glut of global crude supply and amid tensions between the world's two largest economies.

As of 10:40 GMT, West Texas Intermediate (WTI) crude futures traded at $18.18 per barrel, while the lowest level recorded during the session was at $18.05, down more than 8 percent.

Brent crude went in the same direction to trade lower at $25.66 a barrel, while the lowest level recorded during the session was at $25.50.

Today's losses come after crude gained last week, supported by signs of slowing rates of Covid-19 transmission and the entry into force of the oil production cut agreement.

Fears of low oil demand continued to put pressure on crude prices as economic activity around the world stagnates, amid national closures amid the repercussions of the fight against the Coved-19 pandemic.

Prices were negatively affected by US President Donald Trump's threat to impose tariffs on China as a form of retaliation for causing the spread of the virus, renewing fears of seeing a new round of trade war.

Asked about evidence that the virus was caused by research conducted at a laboratory in the Chinese city of Wuhan, Trump said: "We're going to make a very strong report on what we think happened and I think it's going to be very critical.”, adding "personally, I think they made a very terrible mistake."

The United States also accused China of being the cause of the Corona outbreak, referring to an investigation into whether it was caused by an "accident at a laboratory in Wuhan", although no evidence was provided.

At the same time, the number of Covid-19 infections has reached more than 3.5 million worldwide, including more than 1.158 million in the United States alone, according to a map from Johns Hopkins University.

Meanwhile, the dollar index, which measures the performance of the US dollar against a basket of six major currencies, rose today to record its highest level at 99.52, after opening trading today at 99.27.

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