WASHINGTON (dpa-AFX) - Oil prices traded sharply lower on Tuesday, reversing earlier gains, as escalating U.S.-China tensions clouded the outlook for global growth and fuel demand.
Benchmark Brent crude futures fell 2.2 percent to $61.91 a barrel in European trade while WTI crude futures were down 2.4 percent at $58.06.
Reports suggest growing doubts over whether China and the U.S. could strike a tariff deal.
China's commerce ministry said it remained open to talks, but the U.S. cannot seek dialogue while threatening new measures.
'If you wish to fight, we shall fight to the end; if you wish to negotiate, our door remains open,' according to an official statement.
U.S. Treasury Secretary Scott Bessent said he still expects Presidents Donald Trump and Xi Jinping will meet but warned that all options remain open for retaliating against China's move to tighten exports of rare earths.
Beijing said it was Washington's expansion of curbs on Chinese firms in late September that ratcheted up tensions and drove it to further tighten its grip on the critical minerals.
Meanwhile, the U.S. and China will start collecting port fees on each other's vessels from today in tit-for-tat move that threatens global shipping and trade flows.
In another significant development, Beijing has announced sanctions against five U.S.-based subsidiaries of the South Korean shipping giant Hanwha Ocean, accusing the firm of cooperating with Washington in its curbs on China's maritime sector.
Markets now await the release of International Energy Agency's monthly oil market report later in the day for direction. The report includes an analysis of trends in global crude supply and demand.
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