Oil Drops Over 5% on China-US Tensions

Oil fell over 5% on Friday towards $34 a barrel as tensions rose between the United States and China, and doubts grew about the pace of demand recovery from the coronavirus crisis.
China is set to impose new national security legislation on Hong Kong, drawing a warning from President Donald Trump. Beijing also failed to set an economic growth target as the pandemic hammers the word’s second-largest economy.
Brent crude dropped $1.96, or 5.4%, to $34.10 a barrel, after falling to as low as $33.54. US West Texas Intermediate crude declined by $2.41, or 7.1%, to $31.51, Reuters reported.
Oil has slumped in 2020, with Brent hitting a 21-year low below $16 in April and US crude falling below zero. With fuel use rising and supply cuts kicking in, Brent has since more than doubled and was still on track for a fourth weekly gain.
The Organization of the Petroleum Exporting Countries, Russia and other allies, known as OPEC+, agreed to tackle the supply glut with a deal to reduce supply by a record 9.7 million barrels per day from May 1.
Export figures suggest OPEC+ made strong start in complying with the deal. In a sign of the glut easing. US crude inventories fell last week.