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Oil Set For Worst Monthly Drop Since November

After ending at a three-month low on Thursday, oil prices continued to fall on Friday morning and are on track to end May with the largest monthly decline since last November, as trade tensions have an impact on the investor's perspective on the world economy and the demand for oil.

At 08:45 a.m. EDT on Thursday, WTI Crude was down 2.09 percent at $ 55.41, while Brent Crude traded down 2.14 percent at $ 63.93.

Oil prices fell during most of the last week of May and are now scheduled for their largest monthly fall in six months, from November 2018, as the intensification of trade tensions exceeded the withdrawals of crude oil reserves in U.S.

The price of oil plummeted on Wednesday morning after China raised its initial stakes in the trade war, suggesting a strangulation of exports of rare earth minerals to the United States, a movement that rekindled concern over global economy and that caused investors to flee risky badets.

Later on Wednesday, oil prices rose after the American Petroleum Institute (API) reported a big attraction in the 5.265 million barrels crude inventory for the week ended May 24, surpbading the expectations of the badysts of a withdrawal of 857,000 barrels.

On Thursday, the EIA reported a crude inventory draw of 0.3 million barrels for the week to May 24, but this smaller draw than expected caused oil prices to fall later in the day.

On Friday, China's poor economic data and another run of trade tariffs weighed again on equity markets and oil prices.

Government data showed that China's manufacturing activity contracted more than expected, causing investors to wonder how fast China's growth is slowing and how the trade war between the United States and China will weigh on the economic growth in China and the rest of the world.

President Trump said on Thursday that EE. UU It is imposing a 5 percent tariff on all goods imported from Mexico as of June 10, for Mexico to resolve the "crisis of illegal migration." If Mexico fails to alleviate the crisis, tariffs will gradually increase to reach 25 percent, President Trump said.

By Tsvetana Paraskova for Oilprice.com

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