Mubasher: Oil prices plunged on Monday after US President Donald Trump threatened to raise tariffs on Chinese goods this week, a move that poses a risk to the fate of the trade talks between the world’s two biggest economies, Reuters reported.

By 9:34 am GMT, US Nymex crude futures dropped by 1.55% to $60.98 per barrel (pb), while global benchmark Brent futures fell by 1.22% to $69.99 pb.

On Sunday, President Trump said that he would sharply raise US levies on Chinese imports next Friday, sending a shudder of fear across global financial markets, including crude futures.

“[While] investors are scrambling to reduce their risk levels in the markets, […] the prospect of months of trade talks being derailed by Trump has raised concerns over future demand for oil,” futures brokerage London Capital Group research head Jasper Lawler was quoted by Reuters.

On the supply front, there were signs of a future output rise in the US, where oil production already climbed by more than 2 million barrels per day (bpd) since early last year, hitting a record of 12.3 million bpd.

In the same vein, US producers raised oil-directed rigs by 2 to 807 last week, while they reduced the number for the gas-drilling ones to 183, energy services firm Baker Hughes said on Friday.