(Bloomberg) — Oil held losses after a surprise contraction in American manufacturing and a warning from President Donald Trump highlighted the impact and intractability of the U.S.-China trade war.Futures in New York edged higher after closing 2.1% lower on Tuesday. A key U.S. factory gauge fell below 50 for the first time since 2016, adding to concern the world’s largest economy may be headed for a recession. Trump tweeted that China will have a much tougher time securing a trade deal if the Asian nation waits until he wins the 2020 U.S. presidential election.Crude has fallen around 18% from a high in late April as the trade war escalated and the toll it’s taking on the global economy became more apparent. While the Organization for Petroleum Exporting Countries has pushed ahead with a program to limit output, supply from the group increased last month and American production kept rising.“The potential for a slowdown in demand is likely to keep weighing on the market,” said Sungchil Will Yun, a commodities analyst at HI Investment & Futures Corp. in Seoul. “The U.S. manufacturing report was disappointing, and added to the downward price pressure.”WTI for October delivery rose 25 cents, or 0.5%, to $54.19 a barrel on the New York Mercantile Exchange as of 11:05 a.m. in Singapore. The contract declined $1.16 over the previous two days. There was no settlement price on Monday due to the Labor Day holiday in the U.S.Brent for November settlement added 24 cents, or 0.4%, to $58.50 a barrel on the ICE Futures Europe Exchange. The contract lost 0.7% on Tuesday. The global benchmark crude traded at a $4.50 premium to WTI for the same month.The Institute for Supply Management’s purchasing managers index fell to 49.1 in August, weaker than all forecasts in a Bloomberg survey of economists, data released Tuesday showed. Readings below 50 indicate the U.S. manufacturing economy is generally shrinking.Trump sought to prod China into doing a trade deal before the presidential election next year as the two sides struggled to agree on the schedule for a planned meeting later this month. “Think what happens to China when I win,” he said in a tweet Tuesday. “Deal would get MUCH TOUGHER!”\–With assistance from James Thornhill.To contact the reporter on this story: Sharon Cho in Singapore at ccho28@bloomberg.netTo contact the editors responsible for this story: Serene Cheong at scheong20@bloomberg.net, Andrew JanesFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

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