West Texas Intermediate (WTI) crude oil prices continued to decline for the second straight day, trading near $71.50 per barrel during European trading hours on Tuesday (2/4). The decline came amid subdued market sentiment following China's announcement of new tariffs on US goods in retaliation for US President Donald Trump's trade moves, which has sparked fears of a potential trade war between the world's two largest economies.

China's Ministry of Commerce imposed 15% tariffs on US coal and liquefied natural gas (LNG) imports, along with additional 10% levies on crude oil, farm equipment and certain cars, effective February 10. In addition, China imposed export controls on key metals—including tungsten, tellurium, ruthenium and molybdenum—citing national security concerns.

Market participants are closely monitoring the trade negotiations. On Monday afternoon, President Trump said he expected to talk to China within 24 hours, warning of "very, very large" tariffs if a deal is not reached. Meanwhile, he delayed planned tariffs on Canada and Mexico for a month after securing a deal to strengthen border security and combat drug trafficking.

In energy markets, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) reaffirmed its policy of gradually increasing oil production starting in April and removed the U.S. Energy Information Administration (EIA) from its list of monitoring sources. Since returning to office in January, Trump has been pushing OPEC to lower oil prices, arguing that high prices benefit Russia amid the ongoing war in Ukraine. (Newsmaker)

Source: FXstreet