Oil Falls to Lowest in a Week as Trade War Ratchets Up

China threatens to retaliate against planned U.S. tariffs
Expanding American oil inventories added to market fears

The impounded Iranian crude oil tanker, Grace 1, sits anchored off the coast of Gibraltar, on Saturday, July 20, 2019. Tensions have flared in the Strait of Hormuz in recent weeks as Iran resists U.S. sanctions that are crippling its oil exports and lashes out after the seizure on July 4 of one of its ships near Gibraltar.Photographer: Marcelo del Pozo/Bloomberg

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By Harkiran Dhillon

August 14, 2019 at 10:34 PM UTC

Corrected

August 15, 2019 at 7:23 PM UTC

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Oil fell to the lowest level in a week as the U.S.-China trade war escalated against the backdrop of swelling American crude inventories.

Futures fell 1.4% in New York on Thursday. In the latest salvo of the dispute between the world’s biggest economies, the Chinese government said it “has no choice but to take necessary measures to retaliate” against planned U.S. tariffs on billions of dollars in products. Meanwhile, U.S. oil stockpiles expanded by about four million barrels during the past two weeks, halting almost two months of storage withdrawals.