Oil prices set for worst April decline in decades amid trade war concerns

30 Apr 2025 10:06

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Economics
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Oil prices set for worst April decline in decades amid trade war concerns

Photo: Reuters

Oil prices are on track for their steepest April decline in over three decades, as escalating concerns over a U.S.-led trade war dampen global economic growth and energy demand

At the same time, the OPEC+ alliance is easing its supply restrictions, adding further pressure to the market, News.Az reports, citing Reuters.

Global benchmark Brent (BZ=F)— which fell toward $63 a barrel on Wednesday — has shed about 15% this month, the largest loss for that period since the contract started trading in 1988. West Texas Intermediate (CL=F) was back in the upper $50s.

As the main industrial commodity, crude is often subject to huge monthly swings. In April 2020, as the pandemic ripped through markets, WTI actually traded in negative territory at one point. Still, Brent ended higher that month, and WTI’s full-month performance was not as bad as the current showing.

Data due later on Wednesday may confirm a slowdown in US economic growth, after figures showed that consumer confidence collapsed to an almost five-year low. In China, factory activity slipped into the worst contraction since December 2023, revealing early damage from the trade war.

Crude has been battered this month, touching a four-year low, as US President Donald Trump’s sweeping trade levies — especially on top importer China — have blunted the outlook for energy consumption. On the supply side, OPEC+ has been easing output curbs, with JPMorgan Chase & Co. warning the cartel may accelerate planned production increases at a meeting next week.

In the US, nationwide commercial crude stockpiles climbed 3.8 million barrels last week, according to an estimate from the American Petroleum Institute, which also saw a modest rise at the key hub in Cushing, Oklahoma. Official data on holdings are due later on Wednesday.

Trump said China deserved the steep tariffs he’d imposed on their exports, according to remarks to ABC News. He added that he did not believe hard times were ahead for US consumers, while acknowledging that his 145% tariffs on many Chinese goods amounted to a near-embargo.

OPEC+ rocked the crude market in early April, with a surprise decision to increase supply in May by 411,000 barrels a day, the equivalent of three monthly tranches from a previous plan. The group’s meeting scheduled for May 5 is intended to lock in a decision on the volume that’ll be added in June.

News.Az