WTI extends downside below $70.50 as US-China trade war intensifies

• WTI price extends its decline to around $70.35 in Friday's early Asian session.
• Worries about US-China trade tensions continue to undermine the WTI price. 
• Escalating Middle East geopolitical tensions might cap the downside for the black gold. 

West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $70.35 during the early Asian session on Friday. The WTI price edges lower amid concerns of weakening demands after China announced a retaliatory tariff on US crude oil imports, while the US inventory rose for the second consecutive week.

The renewed US-China trade war could weigh on the WTI price. Investors are increasingly worried about a slowing global economy and weakening energy demand in China, the world's top oil importer. On Tuesday, China's finance ministry announced a package of tariffs on a range of US products, including crude oil, farm equipment, and some autos in an immediate response to a 10% tariff on Chinese imports announced by US President Donald Trump.

The US reported a much bigger-than-anticipated jump in crude stockpiles last week, signaling weaker demand. The US Energy Information Administration (EIA) weekly report showed crude oil stockpiles in the United States for the week ending January 31 jumped by 8.664 million barrels, compared to a rise of 3.463 million barrels in the previous week. The market consensus estimated that stocks would increase by 3.2 million barrels. 

On the other hand, the rising geopolitical tensions in the Middle East could provide some support to the WTI price. Trump has proposed seizing control of Gaza, which might exacerbate regional tensions. He is also anticipated to tighten sanctions on Iran, having expressed his desire to reduce Tehran's oil exports to zero.