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Brent crude experienced its largest intraday decline in two years on Wednesday, as escalating trade tensions between China and the United States threatened to affect oil demand, and reports that Libya would reopen the terminals.
Brent was down $ 5.46, or 6.9%, and closed at $ 73.40 a barrel, the largest intraday decline in percentage terms since February 9, 2016. West Texas Intermediate lost 3 , 73 dollars, or 5%, to 70.38 dollars a barrel
Mexican oil exported fell 5% to 65.99 dollars a barrel
The shares of oil companies also showed losses caused by the drop in crude oil.
Chevron fell by 3.21%, 123.66 dollars, Conocophillips 2.35%, to 70.06 dollars and Exxon Mobil to 1.24%, to 82.60 dollars.
International companies like Shell 2.23%, to 29.80 euros and Total 2.67%, to 56.16 euros were also affected.
The collapse occurred after the Libya National Petroleum Corporation reported reopening four terminals after groups from the east of the country handed over control of the ports. "The Libyan thing was just the trigger," said John Saucer, vice president of the Mobius Risk Group.
It's a Concern
Crude oil prices stopped falling after official data showed US oil inventories were down by nearly 13 million barrels last week, its biggest drop in almost two years. But the rebound was short-lived. The increase in tension between Washington and Beijing has raised concerns about demand. The threat of more tariffs on a new $ 200 billion list of Chinese products has shaken the commodity and purse markets
"Tension related to the trade dispute has taken effect" said Michael McCarthy, strategist at CMC Markets. "If these tariffs are implemented, there will be an impact on demand and global growth."
OPEC has indicated that it expects a drop in global oil demand in 2019, as consumption slows and as the production of rival exporters, which suggests that a surplus would again be levied despite cartel actions aimed at reducing supply. In its monthly report, in which it presented its first projections for 2019, OPEC indicated that it had calculated that the world would need 32.18 million barrels per day (bpd) of crude oil .
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