(Bloomberg) -- Oil held losses after a surprise contraction in American manufacturing and a warning from President Donald Trump highlighted the impact and intractability of the U.S.-China trade war.
Futures in New York edged higher after closing 2.1% lower on Tuesday. A key U.S. factory gauge fell below 50 for the first time since 2016, adding to concern the world’s largest economy may be headed for a recession. Trump tweeted that China will have a much tougher time securing a trade deal if the Asian nation waits until he wins the 2020 U.S. presidential election.
Crude has fallen around 18% from a high in late April as the trade war escalated and the toll it’s taking on the global economy became more apparent. While the Organization for Petroleum Exporting Countries has pushed ahead with a program to limit output, supply from the group increased last month and American production kept rising.
“The potential for a slowdown in demand is likely to keep weighing on the market,” said Sungchil Will Yun, a commodities analyst at HI Investment & Futures Corp. in Seoul. “The U.S. manufacturing report was disappointing, and added to the downward price pressure.”
WTI for October delivery rose 29 cents, or 0.5%, to $54.23 a barrel on the New York Mercantile Exchange as of 9:56 a.m. in Singapore. The contract declined $1.16 over the previous two days. There was no settlement price on Monday due to the Labor Day holiday in the U.S.
Brent for November settlement added 23 cents, or 0.4%, to $58.49 a barrel on the ICE (NYSE:ICE) Futures Europe Exchange. The contract lost 0.7% on Tuesday. The global benchmark crude traded at a $4.44 premium to WTI for the same month.
