Oil prices are falling. Investors are watching the clash between China and the US

Oil prices on global stock exchanges are falling, and investors are assessing the effects of the renewed tense situation between the US and China, which may affect demand for raw materials, brokers say.

A barrel of West Texas Intermediate crude oil for delivery on November 11 costs USD 59.26 on the NYMEX in New York, down by 0.39%.

Brent on ICE for XII is priced at USD 63.07 per barrel, down 0.39%.

There is a cautious mood in fuel markets after US President Donald Trump softened his rhetoric towards China.

On Friday, US President Donald Trump said he saw no reason to meet with Chinese leader Xi Jinping due to China's announced export restrictions on rare earth metals.

Donald Trump also threatened to introduce new, higher tariffs on Chinese goods and other retaliatory measures.

In turn, the Chinese Ministry of Commerce on Sunday accused the US of applying double standards due to threats to impose 100% tariffs. in response to Beijing tightening export controls on rare earth metals.

However, the American administration shows signals that the United States is open to an agreement with China.

China also leaves the door open to negotiations, although it is ready to fight to the end in the trade war with the US, the Chinese Ministry of Commerce said on Tuesday.

The latest “exchange of blows” between US President Donald Trump and Chinese President Xi Jinping makes both countries indicate that “the ball is in the opponent's court.”

“While it is currently difficult to assess who has more power in the U.S.-China trade, it is clear that China's export sector can withstand U.S. tariffs of up to 50 percent.” – says Christopher Beddor, deputy director at Gavekal Dragonomics.

“Beijing wants to find out whether customs duties will reach 100 percent, but until such a scenario comes true, customs duties are a lower priority for now,” he adds.

Beddor points out that China's actions regarding the export of rare earth metals are aimed at forcing concessions from the US in terms of technology export control.

“However, it is not in the interest of either side to completely destroy the US-China trade negotiations,” he emphasizes.

Analysts indicate that in the current situation, crude oil is still susceptible to panic selling and cautious purchases by investors, depending on the development of events between Washington and Beijing.

(PAP Business)

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