NEW YORK, Aug. 23 (Xinhua) -- Global crude oil futures saw their principal benchmark prices retreat sharply on Friday, wrapping up the trading week in a gloomy note, as the market was immersed by further angst that deteriorating U.S.-China trade relations would whittle down global oil demand and fuel market volatilities.

The West Texas Intermediate for October delivery tumbled 1.18 U.S. dollars, or a whopping 2.1 percent from the previous day, to settle at 54.17 dollars a barrel on the New York Mercantile Exchange.

The Brent crude for October delivery declined 0.58 dollar, or nearly 1 percent, to close at 59.34 dollars a barrel on the London ICE Futures Exchange.

China on Friday announced its decision to slap additional tariffs on U.S. imports worth about 75 billion U.S. dollars in response to the newly announced U.S. tariff hikes on Chinese goods.

Based on laws and approved by the State Council, a total of 5,078 U.S. products, including crude oil, soybeans, peanuts, seafood, chicken, fruit and vegetables, and animal fur, will be subject to additional tariffs of 10 percent or 5 percent, the Customs Tariff Commission of the State Council announced Friday.

The tariff hikes will be implemented in two batches and take effect at 12:01 p.m. Beijing Time on Sept. 1 and at 12:01 p.m. on Dec. 15, respectively, the commission said in a statement.

The U.S. government announced on Aug. 15 that it will impose additional tariffs of 10 percent on Chinese goods worth about 300 billion U.S. dollars, effective on Sept. 1 and Dec. 15, respectively, in two batches.

"Although the energy sector is not directly impacted by higher tariffs, a slowing global economy as a result of the increased tariffs will reduce demand and may be a headwind for oil prices," Jeremy Zirin, head of Americas equities at UBS Global Wealth Management's (GWM) Chief Investment Office, said in a research report co-written by his team on Friday.

The current deadlock in trade between the world's two largest economies is viewed as "a major bearish consideration that will likely be requiring additional downward oil demand adjustments as this year proceeds," CNBC quoted Jim Ritterbusch, president of Ritterbusch and Associates, as saying on Friday.

Such demand-side fears have put a damper on investor sentiment for quite some time. DNB Markets, a leading Norwegian investment bank, slashed its estimate for oil demand growth to 800,000 barrels per day (bpd) in 2019, down from its previous 1.1 million bpd.

It also revised down its forecast for oil demand growth in 2020 to 1.1 million bpd, from the previous 1.6 million bpd, the bank said in a note to clients on Thursday.

Meanwhile, DNB Markets cut its estimate of the benchmark Brent oil price to 66 dollars for 2019, down from a previous projection of 73 dollars, due to its tepid outlook for global economic growth, which would weigh down global demand.

Global investors have switched on a risk-off mode on Friday, as the Cboe Volatility Index (VIX), widely considered to be the best fear gauge in the market, surged 19.12 percent to 19.87.

"With the ongoing U.S.-China trade conflict, we do not　 regard the current environment as conducive to taking on out-sized risk," said Mark Haefele, a chief investment officer at UBS GWM, in another report on Friday.

Along with the tumbling crude futures, energy equities also extended marked losses. The energy sector among the 11 primary S&P sectors sank over 3.3 percent as of market close.

The sector involves a batch of oil and gas exploration and production companies, integrated power firms and refineries that generate revenue tied to the prices of crude oil, natural gas and other commodities.

"Notably, the energy sector lagged the S&P 500 in the more recent 'risk off' markets in 4Q18 and during the May sell-off earlier this year," Zirin and his team noted.

As the benefits of U.S. fiscal stimulus fade and trade frictions rise, both U.S. economic and corporate profit growth rates have decelerated over the last few quarters, they said.

Thus, the UBS team downgraded their investment position on both the energy and information technology sectors to moderate underweight from neutral, adding that slowing global growth and an increase in U.S.-China trade tensions have increased near-term risks. Enditem

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