Oil prices eased on Monday on concerns over rising tensions between the United States and China over Beijing’s plans to impose security laws on Hong Kong and the possibility of sanctions from Washington.
Oil prices have risen sharply in recent weeks as an easing of coronavirus restrictions has led to increased demand, but the tensions between the United States and China are beginning to weigh on sentiment.
Brent was down 19 cents, or 0.5%, at $34.94 a barrel. U.S. oil was down by 6 cents, or 0.2%, at $33.19 a barrel. Both contracts have risen for the past four weeks, although prices are still down around 45% so far this year.
Hong Kong police used tear gas and water cannons on Sunday to disperse thousands of people rallying against Beijing’s plan to impose national security laws on the city.
“The HK security legislation packs on a hefty amount (of) trade war risk premium,” said Stephen Innes, chief market strategist at AxiCorp, noting that it added to market worries last week about the level of Chinese policy stimulus.
Ties between Washington and Beijing have soured since the outbreak of the new coronavirus. President Donald Trump and President Xi Jinping have traded barbs over the outbreak, including accusations of cover-ups and lack of transparency.
Clashes between the superpowers have included Hong Kong, human rights, trade, and U.S. support for Chinese-claimed Taiwan.