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Oil falls nearly 3% following Trump's announcement of new tariffs

Oil prices fell $2 on Thursday, after U.S. president Donald Trump announced tariffs against trading partners. This stoked fears that a trade war could dampen demand for oil.

Brent futures dropped $1.97 or 2.63% to $72.98 per barrel at 0033 GMT. U.S. West Texas Intermediate Crude Futures fell $1.98 or 2.76% to $69.73.

Trump hailed April 2 as "Liberation Day," with new duties that may overturn the global trading system.

The benchmarks were higher during the previous session, but they turned negative after Trump's Wednesday press conference in which he announced an initial 10% tariff on all imports into the United States as well as higher duties for dozens of its biggest trading partners.

We know that it will negatively impact trade, economic growth, and therefore oil demand. We don't yet know the full extent of the impact, as it is a few years away.

The White House announced on Wednesday that imports of refined products, oil and gas were exempt from the new tariffs proposed by U.S. president Donald Trump.

Trump's tariff policy could cause inflation, slow the economic growth, and intensify trade conflicts, all of which have caused oil prices to drop.

Energy Information Administration data released on Wednesday confirmed the bearish mood, showing that U.S. crude oil inventories increased by an unexpectedly large 6.2 millions barrels in the past week. Analysts had expected a drop of 2.1million barrels. (Reporting and editing by SonaliPaul in New York, Nicole Jao)

(source: Reuters)