Oil prices fall as economic and trade concerns weigh on demand
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Oil prices extended their decline on Tuesday, pressured by growing concerns over the global economic outlook amid persistent trade tensions between the United States and China, the world’s two largest economies. The deteriorating sentiment is raising fears of weaker demand growth, setting a cautious tone across energy markets.
Brent crude futures fell by 0.8% to $65.35 per barrel by 06:35 GMT, while U.S. West Texas Intermediate (WTI) crude futures dropped by the same margin to $61.55 per barrel. Both benchmarks had already shed more than $1 in Monday’s session, as risk appetite continued to erode. Analysts attribute the weakness to fading confidence in future oil consumption, particularly given the lack of clear signals of demand recovery from mainland China.
Priyanka Sachdeva, senior market analyst at Phillip Nova, emphasized that markets are increasingly alert to the U.S.-China negotiations, as worsening trade relations could drive the global economy into recession. This concern was echoed by a Reuters poll in which a majority of economists forecast that President Trump's aggressive tariff strategy risks triggering a global downturn within the year. With China facing the steepest tariff barriers, retaliatory measures have only escalated tensions, forcing a reassessment of oil demand and price projections.
Reflecting the growing uncertainty, Barclays revised its 2025 Brent crude price forecast down by $4 to $70 a barrel. The adjustment cited not only the heightened trade disputes but also strategic shifts within the OPEC+ alliance, which is now considering accelerating production increases. A surplus of one million barrels per day is expected this year if OPEC+ members move forward with additional output, a scenario that would place further downward pressure on prices.
Adding to the bearish outlook, U.S. crude inventories are projected to have risen by approximately 500,000 barrels for the week ended April 15, according to a preliminary Reuters poll. Market participants await the American Petroleum Institute’s inventory report on Tuesday, with official figures from the Energy Information Administration scheduled for release on Wednesday.
In conclusion, oil markets remain vulnerable to downside risks driven by macroeconomic headwinds, trade-related uncertainty, and potential oversupply dynamics. Traders should closely monitor developments in U.S.-China negotiations, OPEC+ policy adjustments, and forthcoming inventory data to gauge the short-term trajectory of crude prices.
Brent crude futures fell by 0.8% to $65.35 per barrel by 06:35 GMT, while U.S. West Texas Intermediate (WTI) crude futures dropped by the same margin to $61.55 per barrel. Both benchmarks had already shed more than $1 in Monday’s session, as risk appetite continued to erode. Analysts attribute the weakness to fading confidence in future oil consumption, particularly given the lack of clear signals of demand recovery from mainland China.
Priyanka Sachdeva, senior market analyst at Phillip Nova, emphasized that markets are increasingly alert to the U.S.-China negotiations, as worsening trade relations could drive the global economy into recession. This concern was echoed by a Reuters poll in which a majority of economists forecast that President Trump's aggressive tariff strategy risks triggering a global downturn within the year. With China facing the steepest tariff barriers, retaliatory measures have only escalated tensions, forcing a reassessment of oil demand and price projections.
Reflecting the growing uncertainty, Barclays revised its 2025 Brent crude price forecast down by $4 to $70 a barrel. The adjustment cited not only the heightened trade disputes but also strategic shifts within the OPEC+ alliance, which is now considering accelerating production increases. A surplus of one million barrels per day is expected this year if OPEC+ members move forward with additional output, a scenario that would place further downward pressure on prices.
Adding to the bearish outlook, U.S. crude inventories are projected to have risen by approximately 500,000 barrels for the week ended April 15, according to a preliminary Reuters poll. Market participants await the American Petroleum Institute’s inventory report on Tuesday, with official figures from the Energy Information Administration scheduled for release on Wednesday.
In conclusion, oil markets remain vulnerable to downside risks driven by macroeconomic headwinds, trade-related uncertainty, and potential oversupply dynamics. Traders should closely monitor developments in U.S.-China negotiations, OPEC+ policy adjustments, and forthcoming inventory data to gauge the short-term trajectory of crude prices.