Oil prices fell on Tuesday as investors lowered their growth expectations for demand due to the ongoing trade war between the United States and China, the world's two largest economies.
اضافة اعلان
Brent crude futures dropped by 44 cents, or 0.7%, to $65.42 per barrel by 04:00 GMT. U.S. West Texas Intermediate (WTI) crude futures fell by 40 cents, or 0.6%, to $61.65 per barrel. Both benchmark crude prices had declined by more than $1 on Monday.
Priyanka Sachdeva, Senior Market Analyst at Phillip Nova, said: “Markets are closely watching the trade negotiations between the U.S. and China, aware that deteriorating trade relations between the world’s two largest economies could push the global economy into recession.”
The lack of confidence in future demand, alongside the absence of any clear signs of demand recovery in mainland China, continues to weigh on oil prices.
President Donald Trump’s push to reshape global trade by imposing tariffs on all U.S. imports has created a significant risk of the global economy slipping into recession this year, according to the majority of economists in a Reuters survey.
China, which has been most affected by these tariffs, responded by imposing tariffs on U.S. imports, sparking a trade war between the world’s two largest oil consumers. This has led analysts to sharply cut their forecasts for oil demand and prices.
On Monday, Barclays lowered its 2025 forecast for Brent crude by $4, to $70 per barrel, citing escalating trade tensions and the shift in production strategy by the OPEC+ group as key factors behind an oil supply surplus of 1 million barrels per day this year.
Meanwhile, sources told Reuters last week that many OPEC+ members, including the Organization of the Petroleum Exporting Countries (OPEC) and its allies, will propose accelerating production increases for the second consecutive month in June.
Oil analyst Philip Verleger stated in a note: “A significant drop in oil prices seems likely if oil-exporting countries increase their production.”
It is also likely that U.S. crude oil inventories have risen by about 500,000 barrels in the week ending April 15, according to a preliminary Reuters poll of analysts on Monday.
The American Petroleum Institute (API), an industry group, will release its estimates for U.S. oil inventories on Tuesday, with official data from the U.S. Energy Information Administration due on Wednesday. (Agencies)
