At 10:36 am in Singapore (0236 GMT), ICE Brent October futures were down 63 cents/b (1.06%) from Friday's settle at $58.71/b, while the front-month NYMEX October light sweet crude futures moved 72 cents/b (1.33%) lower at $53.45/b."The latest escalation in trade tensions between the US and China looks to be one plaguing sentiment for Asia markets going into the week," IG's market strategist Pan Jingyi said.
The US will raise the tariff on $250 billion worth of Chinese imports from 25% to 30% on October 1, and raise the current 10% tariff on another $300 billion of Chinese imports to 15% on September 1, US President Donald Trump tweeted late Friday.
"Sadly, past Administrations have allowed China to get so far ahead of Fair and Balanced Trade that it has become a great burden to the American Taxpayer," Trump tweeted. "As President, I can no longer allow this to happen!"
This came in response to the announcement made by China earlier on Friday to levy a new round of tariffs on $75 billion worth of US imports that will be implemented in two batches from September 1 and December 15.
China's State Council's Tariff Commission said in a statement Friday on the Ministry of Finance's website that the tariffs are in retaliation for the US government's 10% tariff on around $300 billion worth of Chinese goods announced on August 15.
"Investors took this as a signal that the trade conflict has escalated substantially, evaporating any hopes of a resolution in the near future," ANZ analysts said in a note Monday.
"This Knightian uncertainty compounds adverse demand shocks from a prolonged US-China trade conflict amid other challenges to the global economy," Vishnu Varatham, senior economist at Mizuho Bank, said.
Elsewhere, data released by Baker Hughes on Friday showed that the number of active oil rigs operating in the US fell by 16 for the week ended August 24 to 754, the lowest since January 2018.
Although this data was bullish for oil market fundamentals, analysts said that concerns surrounding ongoing US-China trade relations took to the front seat to drive price direction.
"Fundamental data took a back seat," ANZ analysts said, referring to the latest Baker Hughes data.
As of 0236 GMT, the US Dollar Index was unchanged at 97.57.
