Oil prices slipped on Wednesday as the ongoing U.S.-China trade dispute added to global economic uncertainty, prompting traders to reassess the potential effects of the trade war on economic growth and energy demand.
Brent crude futures saw a modest decrease of 18 cents, or 0.3%, settling at $64.49 per barrel by 0315 GMT, while U.S. West Texas Intermediate (WTI) crude fell by 16 cents, or 0.3%, to $61.17. Both benchmarks had dropped 0.3% the previous day.
The International Energy Agency (IEA) warned on Tuesday that global oil demand is expected to increase at its slowest pace in five years in 2025, with U.S. production growth also decelerating. The forecast came in response to President Donald Trump’s tariff policies, which have led to retaliatory actions by trade partners and cast a shadow over global energy markets.
“Investors are struggling to find a catalyst for a significant recovery, as a slowdown in global growth is anticipated due to the ongoing tariff issues, which puts oil demand at risk,” said Yeap Jun Rong, market strategist at IG. “The downward trend for oil prices remains, and any initial optimism about potential tariff rollbacks is likely to fade, with economic data potentially reinforcing a more cautious outlook.”
The IEA also revised its 2025 demand growth forecast, now predicting an increase of only 730,000 barrels per day (bpd), a sharp reduction from the 1.03 million bpd growth expected last month. This adjustment follows a similar downward revision by the Organization of the Petroleum Exporting Countries (OPEC) earlier this week.
Tetsu Emori, CEO of Emori Fund Management, noted that the current imbalance between global crude supply and demand continues to exert pressure on the market. “If the stock market, currently under strain from tariff concerns, sees a rebound, oil prices could surge, pushing WTI above $65. However, without such support, prices are likely to remain in the low $60s,” he said.
The combination of escalating trade tensions and rising oil output from OPEC+ countries, including Russia, has contributed to a 13% decline in oil prices so far this month. Several major banks, including UBS, BNP Paribas, and HSBC, have responded by lowering their price forecasts for crude oil.
U.S. President Trump’s decision to sharply increase tariffs on Chinese goods has triggered retaliatory measures from Beijing, escalating the trade war between the two largest global economies. Markets are concerned that this standoff could lead to a broader global recession.
In another sign of growing tensions, China has reportedly instructed its airlines to halt further deliveries of Boeing jets in response to the U.S. imposition of a 145% tariff on Chinese goods, according to Bloomberg News.
Meanwhile, the latest data from the American Petroleum Institute revealed that U.S. crude oil stocks rose by 2.4 million barrels in the week ending April 11. However, gasoline inventories dropped by 3 million barrels, and distillate stocks saw a decline of 3.2 million barrels.
Related topics:
How Long Can You Hold Oil Futures?
