Oil prices further edged lower on Wednesday, as shifting US tariff policies fuelled uncertainty, prompting traders to weigh the potential impact of the US-China trade war on economic growth and energy demand.
Brent crude futures eased 18 cents, or 0.3 per cent, to $64.49 per barrel by 0315 GMT, while US West Texas Intermediate crude fell 16 cents, or 0.3 per cent, to $61.17. Both benchmarks fell 0.3 per cent on Tuesday.
Global oil demand is expected to grow at its slowest rate for five years in 2025, and US production rises will also taper off, due to US President Donald Trump’s tariffs on trading partners and their retaliatory moves, the International Energy Agency said on Tuesday.
“Investors continue to struggle in finding a catalyst to drive a more meaningful rebound, as global growth is widely expected to slow ahead with US tariffs, which puts oil demand in jeopardy,” said Yeap Jun Rong, market strategist at IG.
“The downward trend for oil prices remains intact, and we may expect initial optimism around tariff rollbacks to fade, and the underlying macro headwinds on upcoming economic data could bring markets back to a more sobering reality,” Yeap added.
World oil demand this year is expected to rise by 730,000 barrels per day, the IEA said, sharply down from 1.03 million bpd expected last month. The reduction is larger than a cut made on Monday by the Organization of the Petroleum Exporting Countries.
“As the IEA highlighted, demand growth will likely remain modest, and the imbalance between global crude oil supply and demand is weighing on the market,” said Tetsu Emori, CEO of Emori Fund Management.
“If the stock market – currently under pressure from tariffs – rebounds, we could see a rally in oil prices pushing WTI above $65. But without that support, prices will likely stay in the low $60s,” he said.
Concerns over Trump’s escalating tariffs, combined with rising output from OPEC+, a group comprising OPEC and its producing allies such as Russia, have already dragged oil prices down roughly 13 per cent so far this month.
The uncertainty surrounding trade tensions has led several banks, including UBS, BNP Paribas, and HSBC, to cut their crude price forecasts.
Trump has ratcheted up tariffs on Chinese goods to eye-watering levels, prompting Beijing to slap retaliatory duties on US imports in an intensifying trade war between the world’s two biggest economies that markets fear will lead to a global recession.
In a further sign of rising tensions, China has ordered its airlines not to take further deliveries of Boeing jets in response to the US decision to impose 145 per cent tariffs on Chinese goods, Bloomberg News reported on Tuesday.
Meanwhile, US crude oil stocks rose 2.4 million barrels in the week ended April 11, while gasoline inventories fell 3 million barrels and distillate stocks dropped 3.2 million barrels, market sources said, citing American Petroleum Institute figures on Tuesday.
