Crude Oil Tumbles on Worries of Counter-Tariffs by China

Trading was volatile and mixed in the financial and commodities markets on Friday as investors first reacted to then positioned themselves in response to the latest threat of additional tariffs on China from the Trump administration and the disappointing U.S. Non-Farm Payrolls report.

Copper

Copper futures were pressured on Friday by fears of a global trade war. Weighing on the market was news that China warned it would fight back “at any cost” with fresh trade measures if the United States continues on its path of protectionism, hours after President Donald Trump threatened to slap an additional $100 billion in tariffs on Chinese goods.

May Comex High Grade Copper futures settled at $3.0585, down $0.0160 or -0.52%. Copper is particularly sensitive to geopolitical headlines.

Copper was particularly sensitive to the movement in the U.S. Dollar. Early in the session, the industrial metal weakened, but rebounded after the dollar gave back its gains after a report showed the U.S. economy in March created the fewest jobs in six months.

Gold

Gold prices finished higher on Friday after early session weakness changed the trend to down on the daily chart. Prices rose as Wall Street equities plunged and the U.S. Dollar weakened amid another threat by President Trump to impose additional tariffs on China. Additionally, Chinese officials compounded the worries about a possible trade war, and U.S. jobs data came in weaker than expected.

June Comex Gold settled at $1336.10, up $7.60 or +0.57%. Friday’s move essentially saved the week for gold.

Crude Oil

U.S. West Texas Intermediate and international-benchmark Brent crude oil finished sharply lower on fears of a global trade war between the United States and China after the Trump administration threatened to hit the world’s second largest economy with additional tariffs.

May WTI crude oil futures settled at $62.06, down $1.48 or -2.33% and June Brent crude oil finished at $67.11, down $1.22 or -1.79%.

U.S. crude was hit the hardest on worries that China could impose counter tariffs on it. “China is the main importer (after Canada) of U.S. crude oil, to the tune of about 400,000 barrels per day,” Petromatrix said.

“If China was to impose counter tariffs on U.S. crude, it would become quickly very heavy for the U.S. supply and demand picture, resulting in U.S. crude oil price pressure that would have a negative impact on global oil prices.”

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