Oil prices drop amid trade war tensions, global demand concerns
Oil prices continued to fall as broader markets also weakened, driven by growing fears of an oversupply linked to the deepening trade dispute between the U.S. and China — the world’s two largest economies.
Brent crude traded near $64 a barrel, with West Texas Intermediate dropping below $61. Concerns over global oil demand worsened after Beijing warned on Wednesday that relying on domestic consumption is insufficient to spur growth, News.Az reports, citing Bloomberg.
In wider markets, warnings by ASML Holdings NV and Nvidia Corp. on the effects of tariffs weighed on US equity futures.
China’s downbeat outlook came despite strong first-quarter economic growth data that showed that production and consumption rebounded strongly in March. But economists and investors were worried that the momentum wouldn’t last as the US and China ratcheted up trade tensions, with President Donald Trump insisting late Tuesday that the ball was in Beijing’s court to start negotiations with Washington.
Crude remains near the lowest in four years, after a sharp drop earlier this month brought about by an onslaught of tariffs and counter-levies between the US and its biggest trading partners. Washington on Tuesday launched a probe into the need for import taxes on critical minerals, while struggling to bridge trade differences this week with the European Union as White House officials said the bulk of the US tariffs imposed on the bloc won’t be removed.
Meanwhile, the International Energy Agency on Tuesday slashed its forecasts for global oil consumption this year, and said that supply additions are likely to be more than enough to satisfy demand.
The industry-funded American Petroleum Institute reported US nationwide crude inventories rose by 2.4 million barrels last week, which would be the third consecutive advance if confirmed by official data later Wednesday. However, the report indicated declines at the oil storage hub in Cushing, Oklahoma, and in fuel inventories.
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