Investing.com - Oil prices underwent volatility on Friday, although major benchmarks still headed for a weekly decline, as the U.S. hit China with $64 billion in tariffs and Beijing accused the move as starting the largest trade war ever.
New York-traded West Texas Intermediate crude futures inched up 1 cent or 0.001% to $72.95 a barrel by 10:41AM ET (14:41GMT).
Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., traded down 14 cents or 0.14%, to $77.28.
The U.S. tariffs on $34 billion worth of Chinese goods went into effect at 12:01AM ET (04:01 GMT) on Friday.
U.S. President Donald Trump indicated late Thursday that another $16 billion are expected to go into effect in two weeks, with an additional $200 billion currently in abeyance and that he gave instructions to identify a further $300 billion of targets.
China’s Customs Tariff Commission of the State Council previously announced that it would immediately retaliate with additional tariffs for 545 items worth about $34 billion, including agricultural products, vehicles and aquatic products, according to China Daily.
Following the U.S. action, the Chinese Ministry of Commerce said it would be “forced to make a counterattack”. According to Chinese media, the Ministry issued a statement accusing the U.S. of violating World Trade Organization rules and “has set off the largest trade war in economic history”.
As part of the retaliatory response, Beijing has threatened a 25% tariff on U.S. crude imports. That could make American crude shipments to China -calculated to be about 400,000 barrels per day, uncompetitive.
West Texas and Brent were both heading for weekly declines of 1.3% and 2.7%, respectively. Also weighing on prices this week was a ramp up in imports led to an unexpected build in U.S. crude supplies.
Net U.S. crude imports rose by 1.4 million barrels per day (bpd), while refinery operations slipped to 97.1% of capacity from 97.5% a week earlier, the EIA said on Thursday.
Inventories of U.S. crude rose by 1.245 million barrels for the week ended June 30, confounding expectations for a draw of 5.20 million barrels, according to data from the Energy Information Administration (EIA).
Later on Friday, traders await the latest Baker Hughes’ data on U.S. production. The number of active U.S. rigs drilling for oil fell by four to 858 last week. That was the second-straight weekly drop in rig counts, raising investor hopes that the rampant pace of domestic output could be slowing at a time of rising global demand.
In other energy trading, gasoline futures fell 0.5% $2.1221 a gallon by 10:42AM ET (14:42GMT), while heating oil gained 0.1% to $2.1815 a gallon.
Lastly, natural gas futures traded down 0.3% to $2.829 per million British thermal units.