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West Texas Intermediate (WTI) US Crude Oil prices collapsed below $60.00 per barrel on Friday, tumbling over 4% in Oil’s worst single-day performance since June’s sharp pullback. Hopes for a cooling of tariffs between the US and China were swept off the table to end an otherwise unremarkable week, souring already-weak investor sentiment amidst an extending US government shutdown.

More tariffs incoming?

US President Donald Trump publicly pulled out of an upcoming trade meeting between himself and Chinese President Xi Jinping, and vowed via social media proclamation to impose additional steep import tariffs on all goods being imported into the US from China. China has ramped up its strict controls over critical rare earths exports, requiring all foreign entities to obtain an export license. President Trump decried the move as China holding the rest of the world “hostage”, and has threatened that he now see “no point” in participating in a sideline discussion about trade with Jinping at the Asia-Pacific Economic Cooperation summit in South Korea towards the end of October.

Investors have quickly adapted to an environment in which US President Donald Trump makes grandiose tariff threats that end in a whisper. However, Friday’s escalating trade-war rhetoric is knocking investor sentiment even lower at a time when the Trump administration is unable to force the two sides of the US government to agree on a funding bill to keep federal operations open.

WTI daily chart

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