A slide in the oil price turned into a dive late on Wednesday, leaving the global crude benchmark with its biggest one-day decline in more than two years.

Brent crude sank by $5.46, or 6.9 per cent, to settle at $73.40 a barrel. It was the largest percentage fall since February 2016. The sharp move reflected widespread weakness in commodity markets as trade tensions escalate between the US and China.

Crude also was hit after Libya’s internationally recognised state oil company said it was reopening four key export terminals which had been handed back by rival factions in the east, suggesting additional supplies to meet rising global demand.

Separately, Opec on Wednesday said Saudi Arabia had raised production by more than 400,000 barrels a day in June as it moved to try to cap a price rally and replace production from struggling members of the group.

Metals from copper to zinc and agricultural commodities from soyabeans to hogs were also lower, after US president Donald Trump started a process to impose tariffs on a further $200bn of imports from China. The Bloomberg commodity index ended the day off 2.7 per cent.

Brent crude rebounded $1.21, or 1.7 per cent, on Thursday to $74.61 a barrel. Its US counterpart, West Texas Intermediate, ticked up 0.38 per cent early in the Chicago morning, leaving it at $70.70 per barrel.

Analysts and brokers suggested the fall on Wednesday came as fast-moving money managers had quickly pared their bullish positions. The impetus appeared to be concerns about the effects of the trade dispute between the US and China, which together account for a third of world oil demand.

“This is something that has the potential to push the global economy into some sort of slowdown, which would hit oil demand and obviously be bearish,” said Michael Wittner, oil analyst at Société Générale in New York. “It’s not an irrational fear.”

Following Mr Trump’s election victory in November 2016, commodities rallied as investors warmed to his pro-business agenda and plan to deliver a huge infrastructure programme. Now, they are falling on fears his campaign to rebalance trade could slow global growth.

“We view the White House’s announcement of an additional $200bn round of tariffs as significant in escalating the tensions closer to a full-blown tit-for-tat trade war,” said Bart Melek, head of commodity strategy at TD Securities.

China is the biggest consumer of almost all metals, many of which are turned into products for export. Investors are also worried about slowing growth in China as the government seeks to rein in lending and defuse a credit bubble.

Copper, a metal widely used in consumer appliances such as refrigerators that could be hit by the latest tariffs, fell 3 per cent to $6,137 a tonne on the London Metal Exchange, touching its lowest level in a year.

Nickel, which is used in stainless steel and electric car batteries, slid 3 per cent to $13,570, while zinc, used to rustproof steel, dropped as much as 6 per cent to $2,500 a tonne.

That reflected the knock-on effects of heavy selling of zinc in China. Traders said the holder of the huge copper bet on the Shanghai Futures Exchange was shorting zinc in an effort to offset some of his losses.

The commodity market sell-off also weighed on mining stocks in London. Glencore, a big producer of copper, zinc and nickel, fell 3.5 per cent to 315p, while Anglo American lost 3.6 per cent to 1,660p and Rio Tinto shed 3.1 per cent to 4,014p.

Mark Hansen, chief executive of Concord Resources, a physical commodity trader, said it was unlikely that commodity prices would recover quickly. “I think we have seen the highs for the year,” he said.

Agricultural commodities also suffered, with soyabean futures in Chicago falling 2.6 per cent to $8.29¾ a bushel, the lowest since late 2008. The August lean hogs contract slid 1.4 per cent to 68.8 cents per pound. China has raised tariffs on US exports of soyabeans and pork.

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Oil price tumbles as US-China trade war grows