On Tuesday, oil prices are declining due to pressure from concerns over escalating trade tensions. Market participants are worried about the impact of increasing friction between the US and EU on economic activity and fuel demand.
The Financial Times (FT) reports that Chinese oil traders are betting on cheap crude, disregarding the long-term risks of a trade confrontation with the United States.
Morgan Stanley reports that the global oil market is currently experiencing a unique scenario. While fuel prices indicate a short-term supply shortage, they also point to a significant demand surplus in the long run.
According to LSEG data, India increased its purchases of Russian ESPO light crude in April to the highest level since last August. The surge is attributed to weak demand from China, the main consumer of ESPO.
Barclays has cut its forecast for Brent crude prices this year by $4 to $70 per barrel, with the grade expected to reach as low as $62 in 2026. The analysts cite trade tensions and OPEC+’s shift in the output.
Oil slipped during early Asian trading on Tuesday. Investors cut their crude demand outlook due to the ongoing trade confrontation between the US and China, the world’s leading economies.
In March, Chinese refineries processed the largest volume of oil in a year. However, crude inventories rose to their highest level in almost three years due to increased imports. China's crude oil glut in March was the highest since mid-2023, at 1.74 million barrels per day (bpd).
The decline in oil prices to multi-year lows, coupled with high import tariffs, has caused a slowdown in shale oil drilling by small companies in the United States. According to Reuters, this could hinder future growth in the country's energy production.
Reuters reports that oil gained in early trade on Monday. However, the prices remain constrained by uncertainty over trade negotiations between China and the US, as well as the prospect of OPEC+ raising production.
An increase of the indicator value may contribute to the rise in quotes of WTI, Brent.
An increase of the indicator value may contribute to the fall in quotes of WTI, Brent.
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Oil price movements are more than just charts on a screen. It is one of the key drivers of the global economy. Understanding these dynamics helps in making rational decisions and adapting to changes.
