Trump's trade fights hit crude prices
- Ben Geman, author of Axios Generate
Oil prices are sinking Friday morning following Trump's Mexico tariff tweet and Thursday's White House announcement of new tariffs against Mexico and a smaller-than-expected drop in U.S. stockpiles.
Why it matters: Trade fights have the potential to soften demand. Battles with China were already putting downward pressure on oil, and the opening of another front in Trump's trade fights only adds to that sentiment.
- Separately, there's growing sentiment that this move against Mexico could decimate the auto industry.
Where it stands: Oil prices dropped to around $55.36 for WTI crude and $63.94 for Brent in trading this morning.
What they're saying: John Driscoll of JTD Energy Services tells Bloomberg that Trump “seems willing to fight trade wars now on multiple fronts.”
- That's a "genuine worry for global growth and oil demand," the news service reports in summarizing his comments.
The big picture: Trade tensions and high U.S. production are putting oil prices on pace for their biggest monthly drop since November, Reuters reports.
Go deeper: How trade wars like Trump's threaten U.S. oil and gas exports