Oil down nearly 2% as trade war shakes confidence

TOKYO, Aug 26 (Reuters) - Oil prices fell on Monday, pushing
U.S. crude to its lowest in more than two weeks, as a ratcheting
up of tensions in the U.S.-China war knocked confidence in the
global economy.
Brent crude LCOc1 was down 89 cents, or 1.5%, at $58.45 a
barrel by 0044 GMT, having earlier touched $58.24, the lowest
since Aug. 15.
U.S. oil CLc1 fell $1, or 1.8%, to $53.17 a barrel,
earlier falling to $52.96, the lowest since Aug. 9.
Oil prices are being hit "in large part because of worries
about a severe global economic slowdown and potentially even a
U.S. recession," said Stephen Innes, managing partner at
Valour Markets.
Concerns about an economic slowdown are being fanned by the
intensifying trade war between the United States and China.
China's commerce ministry said late last week it would
impose additional tariffs of 5% or 10% on a total of 5,078
products originating from the United States, including crude
oil, agricultural products such as soybeans, and small aircraft.
In retaliation, President Donald Trump said he was ordering
U.S. companies to look at ways to close operations in China and
make products in the United States. U.S. Federal Reserve chair Jerome Powell told an annual
economic symposium in Jackson Hole, Wyoming that the U.S.
economy is in a "favourable place" and the Federal Reserve will
"act as appropriate" to keep the current economic expansion on
track."
The remarks gave few clues about whether the central bank
will cut interest rates at its next meeting.
But exacerbating concern over the possibility of recession,
U.S. manufacturing industries registered their first month of
contraction in almost a decade. U.S. energy firms this week cut the most oil rigs in about
four months, with the rig count falling to the lowest since
January 2018, as producers cut spending on new drilling and
completions. Hedge funds and other money managers raised their bullish
wagers on U.S. crude to a three-month high in the latest week,
the U.S. Commodity Futures Trading Commission (CFTC) said.