Oil prices fell sharply on Wednesday, hammered by an escalating trade dispute between the United States and China, weak Chinese import data and a smaller-than-anticipated drop in American crude stockpiles.
U.S. West Texas Intermediate (WTI) crude futures ended Wednesday's session at a seven-week low, dropping $2.23, or 3.2 percent, to $66.94.
Front-month Brent crude oil futures fell $2.40, or 3.2 percent, to $72.25 a barrel by 2:20 p.m. ET, after hitting a three-week low at the bottom of the session.
WTI has now failed to break through $70 a barrel several times this week, and fell through a recent low near $67 on Wednesday, said John Kilduff, founding partner at energy hedge fund Again Capital.
"If we get below $66 here, you're arguably violating the long-term uptrend channel," he said, referring to technical levels that bracket U.S. crude's upward trajectory this year.
China on Wednesday threatened to slap a 25 percent tariff on $16 billion of U.S. goods. The move came in response to the Trump administration's plan to slap the same tariff on an equal amount of Chinese imports in the coming weeks.
The mounting trade tension has raised concerns that global economic growth will slow, lowering demand for crude oil in the process.
The list of U.S. goods released by China on Wednesday includes diesel, fuel oils and other petroleum products. China announced plans on Friday to place tariffs on U.S. liquefied natural gas.
"It's certainly going to impact on movement between the U.S. and China, making it less efficient, meaning pressure on prices here," said Andrew Lipow, president of Lipow Oil Associates.
Earlier on Wednesday, government data showed China's imports of crude oil in July rose slightly after falling in the previous two months. However, July imports still ranked as the third lowest monthly level this year, Reuters reported.
The weakness was pronounced at China's independent oil refineries, known as teapots, which the market views as an indicator of real demand for the world's second biggest oil consumer, Kilduff said.
Traders were also scrutinizing weekly data on U.S. crude stockpiles, which showed inventories fell by 1.4 million barrels in the week through Aug. 3.