WASHINGTON (dpa-AFX) - Oil extended losses on Friday and remained on track for its biggest monthly drop in six months as a broadening of the trade conflict raised fresh concerns about the demand outlook.
Front-month benchmark Brent crude, the international benchmark for oil prices, fell 2.6 percent to $63.64 per barrel, while U.S. West Texas Intermediate (WTI) crude futures were down 2.1 percent at $55.39 per barrel.
Brent futures are heading for a 10 percent slide in May and WTI for a 13 percent drop, marking their biggest monthly losses since last November.
Coming on the top of the U.S.-China trade dispute, U.S. President Donald Trump has announced new tariffs on all goods coming from Mexico to curb illegal immigration across the border to the U.S.
In a tweet, Trump said that from 10 June a 5 percent tariff would be imposed and would slowly rise until the situation is resolved.
Analysts fear that a prolonged trade conflict will trigger a global recession and weigh on oil demand.
Adding to recent concerns over growth, official data showed today that China's manufacturing activity declined in May for the first time in three months.
A smaller-than-expected drop in U.S. crude stockpiles last week contributed as well to oil's slide. Although the drop was the first in three weeks, it was much less than what the market had forecast.
According to the data released by the U.S. Energy Information Administration Thursday morning, crude inventories declined by 280,000 barrels in the week ended May 24th, about three times less than what analysts had forecast.
Gasoline inventories were up by 2.2 million barrels last week, against expectations of a modest fall.
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