NEW YORK, May 31 (Xinhua) -- Oil prices plunged on Friday as U.S. administration's latest tariff threat on Mexico intensified concerns over energy trade and economic outlook.
The West Texas Intermediate (WTI) for July delivery dipped 3.09 U.S. dollars to settle at 53.50 dollars a barrel on the New York Mercantile Exchange, while Brent crude for July delivery was down 2.38 dollars to close at 64.49 dollars a barrel on the London ICE Futures Exchange.
The U.S. oil benchmark lost nearly 8.75 percent for the week and the Brent crude prices decreased more than 6 percent.
U.S. President Donald Trump said on Thursday he would impose a 5-percent tariff on all imported Mexican goods beginning June 10 so as to pressure the country to halt undocumented migrants crossing the border, and will gradually increase tariffs until the problem is remedied, a move that worries many.
Mexico is one of the largest U.S. trade partners and major supplier of crude oil.
Experts said the move could hit the longstanding lucrative cross-border energy trade, especially hitting U.S. refiners that use Mexican oil.
U.S. refiners import roughly 680,000 barrels per day of Mexican crude and the 5 percent tariff could add an extra 2 million dollars to the cost of their daily purchases, according to analysts at PVM Oil Associates.
The escalation of U.S.-Mexico trade tensions also heightened investors' fears of global economic slowdown, which may weaken demand for energy.
On the U.S. equities market, the S&P 500 energy sector fell 1.62 percent at the close, among the worst-performing groups in the index.
The oil prices have been pressured recently with global trade tensions and signs of slowing economy among the major headwinds.
Meanwhile, the market gained some support from the ongoing efforts of supply cuts by the Organization of the Petroleum Exporting Countries (OPEC) and its allies.
OPEC and other major oil producers, including Russia, pledged in December to cut production by 1.2 million barrels per day in order to prop up prices, effective from this January.
Traders were also looking ahead to the next meeting by those countries to see whether their production pact will be extended, experts noted.
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