* Trump says China ‘broke the deal’ before trade talks resume
* Brent futures technical indicator points to potential rebound

By Jessica Summers and Robert Tuttle

(Bloomberg) —

Crude slid as a trade spat between the U.S. and China overshadowed concerns over global supply disruptions.

Futures in New York fell as much as 1.9%. Just as the U.S. and China prepare for talks in Washington, President Donald Trump said that China’s leaders “broke the deal” he was negotiating with them on trade. Beijing has warned it will retaliate if he follows through on a plan to raise tariffs. Meanwhile, Iran’s oil shipments tumbled this month with not a single ship seen leaving the nation’s oil terminals for foreign ports.

“The fears over the fallout from the U.S.-China trade war is impacting everything,” said John Kilduff, partner at Again Capital LLC, a New York hedge fund focused on energy. “It’s just so damaging to the Asian economies in particular and it goes to the heart of the demand side of the equation in oil.”

Crude has fluctuated between gains and losses this week as investors assess the likelihood of a tariff increase, while also focusing on risks to oil supply from the ending of Iran sanctions waivers and Venezuela’s economic crisis.

West Texas Intermediate crude for June delivery slid 60 cents to $61.52 a barrel at 12:30 p.m. on the New York Mercantile Exchange.

Brent for July settlement fell 34 cents to $70.03 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude was at a premium of $8.38 to WTI for the same month.

Yet, a key technical indicator shows a potential rebound may be in store for crude. Brent crude is hugging the lower Bollinger band, indicating the commodity is oversold.

China’s top trade envoy, Vice Premier Liu He, is due to land in the U.S. capital on Thursday afternoon and go immediately into discussions with President Donald Trump’s top negotiator, Robert Lighthizer. U.S. tariffs on some $200 billion in Chinese goods are set to increase to 25% just hours later.

Oil’s decline has been “driven by the equity sell-off and the risk fears that we’ve seen,” said Rob Haworth, who helps oversee $151 billion at U.S. Bank Wealth Management in Seattle. “For now, with this global risk-off sentiment, that leaves oil under pressure no matter what, unless we start to see signs of actual shortages.”

Other oil-market news:

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* Gasoline futures dropped 0.2% to $1.9715 a gallon.
* Chevron Corp. is abandoning its $33 billion offer for oil driller Anadarko Petroleum Corp., the culmination of a month-long bidding war in which Occidental Petroleum Corp. prevailed over a rival five times its size.
* Iraq’s decision to raise its crude prices is the latest evidence Middle East exporters are trying to cash in on a scramble by Asian buyers to replace Iranian barrels lost to U.S. sanctions.
* Jacques Gabillon, co-head of commodities at Goldman Sachs Group Inc., is leaving the bank, the latest high-profile departure from the under-fire division that was once the envy of Wall Street.
* India stepped up its purchases of U.S. crude amid OPEC cuts and growing pressure to cut back on Venezuelan and Iranian imports.

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–With assistance from James Thornhill, Saket Sundria and Alex Longley.

To contact the reporters on this story:
Jessica Summers in New York at jsummers24@bloomberg.net;
Robert Tuttle in Calgary at rtuttle@bloomberg.net

To contact the editors responsible for this story:
David Marino at dmarino4@bloomberg.net
Catherine Traywick