European stocks tumbled today and US oil prices fell after US President Donald Trump announced tariffs on Chinese goods and Beijing responded with similar measures, escalating fears of a trade war.
The West Texas Intermediate (WTI) crude futures fell to their lowest level since April, dropping to to $63.59 per barrel before rallying slightly to $63.98.
Ahead of a contentious meeting of the Organization of the Petroleum Exporting Countries (Opec) on Friday, international oil prices also fell, with Brent crude down 0.6 percent to $72.98 per barrel.
Stocks also took a hit in early trading, with the FTSE falling to 7,620, its lowest point in over a month, before rallying slightly later in the day.
The Stoxx 600 slipped 0.3 per cent and Germany's DAX fell 0.5 percent while France's CAC dropped 0.7 percent.
“Oil continues to fall ahead of this weeks vital OPEC meeting, and even here there is no escaping the talk of trade wars,” said Chris Beauchamp, chief market analyst at IG.
“In the end, everything comes back to economic growth, and as oil continues to rise in price it will hit activity.
“Coupled with higher tariffs and the worries facing the global economy seem much more difficult to overcome.”
On Friday, Trump announced tariffs on $50bn worth of Chinese products, prompting Beijing to respond with duties on American exports, including crude oil.
The escalating trade war also sent Asian stocks tumbling, with shares falling to a 2.5 wee low.
David Madden, market analyst at CMC Markets UK, said: “Stock markets are broadly lower today as traders are increasingly worried about the prospect of a trade war.
“Tensions between the US and China are escalating, and we are not any closer to an agreement being reached.
“With neither side willing to back down, investors are caught in the middle.”