Oil prices remained relatively stable on Friday; however, they are poised for a second consecutive weekly decline due to rising concerns over the escalating trade war between the United States and China. As of 08:27 GMT, Brent crude futures experienced a slight decrease of 3 cents, or 0.05%, reaching $63.30 a barrel.
Conversely, U.S. West Texas Intermediate (WTI) crude futures edged up by 2 cents, or 0.03%, settling at $60.09. Both Brent and WTI are anticipated to see weekly drops of 3.5% and 3%, respectively, building on substantial losses of approximately 11% recorded last week.
Brent crude dipped below $60 a barrel earlier this week, marking its lowest value since February 2021. The decline follows China’s announcement on Friday regarding a steep tariff increase on U.S. goods from 84% to 125%, in retaliation to actions taken by U.S. President Donald Trump, who raised tariffs against China to 145% earlier in the week.
Although Trump delayed imposing heavy tariffs on numerous trading partners, the ongoing standoff between the two leading global economies threatens to diminish global trade volumes and can disrupt trading routes, which is likely to dampen economic growth and reduce oil demand. Analysts at PVM noted that the market is driven by tariffs and is affected by diminishing confidence in clear policy-making.
Furthermore, BMI analysts commented that they foresee continued pressure on prices as market participants evaluate the ongoing trade discussions and escalating tensions between Washington and Beijing. The U.S. Energy Information Administration recently revised its global economic growth forecasts downward, indicating that tariffs could significantly impact oil prices, leading to adjustments in both U.S. and global oil demand expectations for this year and the next.
Meanwhile, projections concerning China’s economic growth suggest a slowdown compared to the previous year, compounded by the pressure created by U.S. tariffs affecting the world’s largest oil importer.