Crude Oil Prices Drop on Weaker Demand Outlook

Crude Oil Prices Drop on Weaker Demand Outlook Image/Mint

Reuters | April 29, 2025 | 12:38 PM IST | Breaking News, Business, World | Follow on Google News

Crude Oil Prices Drop on Weaker Demand Outlook Image/Mint

SINGAPORE, April 29 (Reuters) – Crude oil prices fell on Tuesday as investors lowered their demand growth expectations due to the ongoing trade war between the United States and China, the world’s two biggest economies.

Brent crude futures fell by 51 cents, or 0.8%, to $65.35 per barrel by 0635 GMT. U.S. West Texas Intermediate crude futures fell 50 cents, or 0.8%, to $61.55 a barrel. Both benchmarks fell more than $1 on Monday.

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“Markets are closely monitoring the U.S.-China trade negotiations, understanding that deteriorating trade relations between the world’s two largest economies could lead the global economy towards a recession,” said Priyanka Sachdeva, senior market analyst at Phillip Nova.

“The lack of confidence in future demand and the absence of concrete signals for demand revival in mainland China will continue to overshadow oil prices.”

U.S. President Donald Trump’s push to reshape world trade by imposing tariffs on all U.S. imports has created a high risk that the global economy will slip into a recession this year, according to a majority of economists in a Reuters poll.

China, hit with the steepest of those tariffs, has responded with its own levies against U.S. imports, stoking a trade war between the top two oil consuming nations. That has prompted analysts to sharply lower their oil demand and price forecasts.

Barclays (BARC.L), opens new tab on Monday cut its 2025 Brent crude price forecast by $4 to $70 a barrel, citing elevated trade tensions and a pivot in production strategy by the OPEC+ group as drivers of a 1 million barrel per day oil supply surplus this year.

Meanwhile, several members of OPEC+, which comprises the Organization of the Petroleum Exporting Countries and its allies, will suggest an acceleration of output hikes for a second consecutive month in June, sources told Reuters last week.

“A substantial (oil) price decrease appears probable if exporting countries boost production,” oil analyst Philip Verleger said in a note.

U.S. crude oil stockpiles also likely rose by about 500,000 barrels in the week ended April 15, according to a preliminary Reuters poll of analysts on Monday.

Industry group American Petroleum Institute will publish its estimates on U.S. oil inventories on Tuesday. Official figures from the Energy Information Administration will follow on Wednesday.

Reporting by Shariq Khan in New York and Emily Chow in Singapore; Editing by Sonali Paul and Saad Sayeed

(Except for the headline, this story has not been edited by VoM News staff and is published from the syndicated feed)

Reuters