CORRECTED-UPDATE 9-Oil gains about 3%; records loss for week after Trump tariff threat

(Corrects weekly price moves in bullet 2, paragraph 6 of Aug. 2
report to show that Brent fell 2.5%, not 2.7%, and that WTI fell
around 1%, not 1.2%)
* China warns of retaliation after Trump vows new tariffs
* For the week, Brent lost about 2.5%, while WTI shed about
1%.
* U.S. crude June exports hit record high, China resumes
purchases
* U.S. oil drillers cut rigs for fifth week in a row -Baker
Hughes
* Interactive graphic on daily price moves: https://tmsnrt.rs/2yxypOy

By Laila Kearney
NEW YORK, Aug 2 (Reuters) - Oil prices gained about 3% on
Friday a day after recording their biggest daily drop in several
years on U.S. President Donald Trump's vow to impose more
tariffs on Chinese imports.
For the week, crude oil benchmarks recorded a loss.
Washington's new tariffs on China, due to take effect on
Sept. 1, intensify the trade war between the world's top two
economies. Any resulting economic slowdown could hurt crude
demand. Brent crude LCOc1 futures for October delivery settled at
$61.89 a barrel, up $1.39, or 2.3%. The global benchmark slid
more than 7% on Thursday, the steepest daily drop in more than
three years.
WTI crude CLc1 futures for September delivery settled at
$55.66 a barrel, rising $1.71, or 3.17%, after Thursday's nearly
8% plunge, the biggest loss in more than four years.
For the week, Brent lost about 2.5%, while WTI shed about
1%.
Before Thursday's decline, crude futures had seen a fragile
rally supported by steady drawdowns in U.S. inventories but
pressured by a shaky global demand outlook.
"The market is still digesting the impact of the tariffs on
oil markets, but given China has been taking very little U.S.
crude year-to-date, we see little scope for the tariffs to
directly impact market fundamentals," RoboResearch Commodities
Strategist Ryan Fitzmaurice said in a note.
Trump said he would impose a 10% tariff on $300 billion of
Chinese imports and said he could raise tariffs further if
China's president, Xi Jinping, failed to move more quickly
toward a trade deal. The announcement extends U.S. tariffs to nearly all imported
Chinese products. China said it would not accept "intimidation
or blackmail" and pledged countermeasures. China, once the top buyer of U.S. crude, slashed its
purchases last year as the trade war dragged on.
The escalating trade war, however, could push the U.S.
Federal Reserve toward more interest rates cuts, which would
likely boost oil prices.
"The trade war is going to increase the odds dramatically
that the Fed is going to have to cut rates again, maybe twice
this year," said Phil Flynn, an analyst at Price Futures Group
in Chicago.
U.S. crude oil exports surged 260,000 barrels per day (bpd)
in June to a monthly record of 3.16 million bpd as South Korea
bought record volumes and China resumed purchases, data from the
U.S. Census Bureau showed. The market also watched the weekly U.S. oil rig count, an
indicator of future production, which fell for a fifth week in a
row as most independent producers cut spending even though
majors were still pushing ahead with investments in new
drilling. RIG/U

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TECHNICALS-U.S. oil may fall more to $51.62 L4N24Y0H1
TECHNICALS-Brent oil targets $57.19 L4N24Y0BH
Daily closes for Brent, U.S. crude in 2019 png https://tmsnrt.rs/2yHHep7
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