Crude futures dip in Asia trade as US-China tensions resurface

New York — 0215 GMT: Crude oil futures moved lower in mid-morning trade in Asia Friday as tensions resurfaced between the US and China.

At 10:15 am Singapore time (0215 GMT), ICE Brent July crude futures were down 79 cents/b (2.19%) from Thursday's settle at $35.27/b, while the NYMEX July light sweet crude contract was 72 cents/b (0.15%) lower at $33.20/b.

Crude prices had rallied for a sixth consecutive session Thursday, but retreated as growing US-China trade tensions tempered sentiment.

"The oscillating sentiment had seen caution taking over amid brewing US-China tensions; one to cast a shadow for Asia markets going into Friday watching China's National People's Congress commencement," IG market strategist Pan Jingyi said in a note Friday.

US President Donald Trump recently again blamed Beijing for the COVID-19 pandemic. This comes amid existing trade tensions between the two countries that have clouded the outlook for oil and shipping demand. Beijing said Thursday it would retaliate if the US passes a bill authorizing sanctions against China over the coronavirus outbreak.

Chinese Premier Li Keqiang is due to address the nation at the National People's Congress later Friday on issues around the coronavirus and the economy and market participants are awaiting the speech for further cues.

Uncertainty also lingered Friday around the lifting of lockdown measures across the globe as fears of a further wave of COVID-19 infections remained.

"Thus far, traders were right to call a trough in global demand in April," AxiCorp chief global markets strategist Stephen Innes said in a note Friday. "Still, oil prices will remain sensitive to any hint that the easing of global lockdowns might result in the second wave of COVID-19 infections and, therefore, a more protracted impact on demand," Innes added.