EghtesadOnline: Oil slumped over 3% on Friday and posted its biggest monthly drop in six months, after US President Donald Trump stoked global trade tensions by threatening tariffs on Mexico, a key US trade partner and major supplier of crude oil.
Brent crude futures fell $2.38, or 3.6%, to settle at $64.49 a barrel. US WTI crude futures fell $3.09 to $53.50 a barrel, a 5.5% loss, CNBC reported.
Brent touched a session low of $64.37 a barrel, lowest since March 8. WTI hit $53.41 a barrel, weakest since Feb. 14.
Brent futures posted an 11% slide in May and WTI a 16% drop, their biggest monthly losses since November, Financial Tribune reported.
Trump vowed on Thursday to ratchet up tariffs unless Mexico stopped people from illegally crossing into the United States. The plan would impose a 5% tariff on Mexican imports starting on June 10 and increase monthly, up to 25% on Oct. 1.
That could hit the lucrative cross-border energy trade.
“US refiners import roughly 680,000 barrels per day of Mexican crude. The 5% tariff adds an extra $2 million to the cost of their daily purchases,” PVM analysts said.
The United States also exports more fuels to Mexico than any other country, according to the US Energy Department. So far Mexico has not said whether it would retaliate.