Oil Slumps 3% on OPEC Supply Rise, Chinese Tariffs

Oil prices fell more than $2 a barrel on Friday after two of the world’s biggest producers indicated they might increase output at next week’s OPEC meeting, while US exports were threatened by potential Chinese tariffs on crude oil and refined products.

Oil investors have been nervous ahead of the coming OPEC summit in Vienna, Austria. Saudi Arabia and Russia have already boosted production modestly and have indicated they were prepared to increase output at that meeting, Reuters reported.

Brent crude oil fell $2.5, or 3.29%, to settle at $73.44 a barrel. US crude settled $1.83 lower at $65.06 a barrel. In post-settlement trading, US crude retreated further, falling 2.25, or 3.4%, to $64.64 a barrel.

Brent crude was on track to end the week down more than 4%, while US crude was heading to fall 1.7%.

After settlement, China announced $50 billion in retaliatory tariffs, in response to a series of levies by US President Donald Trump earlier.

Some investors were surprised when crude oil and other energy products were included for tariffs at a later date, the official Xinhua news agency reported, citing the Tariff Commission of the State Council.

Over the past six months, the United States has exported an average 363,000 bpd of crude oil to China, which along with Canada is the biggest buyer of US crude.

“They were a big outlet and we’re going to notice it,” said John Kilduff, a partner at Again Capital in New York. “It’ll take time for other buyers to absorb that crude.”