Oil Prices Fall As U.S.-China Trade Uncertainty
Oil headed for a weekly decline as investors weighed conflicting messages on trade between the U.S. and China, adding to uncertainty in a global market roiled by President Donald Trump’s tariffs.
Brent was steady below $67 a barrel on Friday, down nearly 2% this week, while West Texas Intermediate neared $63. The U.S. president said Thursday that his administration was talking to China about trade, despite Beijing’s previous denials that there were any negotiations on a deal.
Oil has fallen sharply this month on concerns that Trump’s sweeping tariffs and retaliatory moves from trading partners including China will cripple economic activity and choke energy demand. In an effort to reassure U.S. oil companies, Energy Secretary Chris Wright said the trade turmoil would be fleeting and that the administration fully supports more crude production. “The conflicting headlines on the U.S.-China tariff situation are not helping sentiment,” said Priyanka Sachdeva, senior market analyst for brokerage Phillip Nova Pte in Singapore. “Oil investors should be biased to the downside.” OPEC+ has added to the bearish drag by increasing idle oil production, stoking concerns about a supply glut.
The group meets on May 5 to discuss its June output plan, and Reuters reported this week that some members are seeking a big increase as a dispute over quota compliance worsens. Still, some metrics point to near-term strength in the oil market. Flash spreads for global benchmarks Brent and WTI have widened this month in a bullish backwardation structure, signaling tight supply. Brent for June settlement rose 0.2% to $66.68 a barrel at 10:45 a.m. in Singapore. WTI for June delivery was little changed at $62.95 a barrel.
Source: Bloomberg
