Oil prices edged up on Friday after a steep decline in the previous session, but both Brent and WTI crude are on course to post a second consecutive weekly loss. The ongoing trade war between the United States and China continues to cast a shadow over global economic outlooks and energy demand.
As of 9:46 a.m. Saudi time, Brent crude futures rose by 90 cents, or 1.4%, reaching $64.23 a barrel. Meanwhile, US West Texas Intermediate (WTI) crude climbed 88 cents, or 1.5%, to hit $60.95. Despite the modest recovery, Brent is poised to end the week 2.1% lower, and WTI is on track to drop 1.8%. This follows an 11% decline for both benchmarks in the prior week.
Market analysts are attributing the pressure on oil prices to prolonged tensions between the US and China—the world’s two largest economies—which are feared to curb global trade and economic growth.
BMI analysts noted in a Friday report, “We expect prices will remain under pressure as investors assess ongoing trade negotiations and rising tensions between Washington and Beijing.”
Daniel Hynes, a senior commodity strategist at ANZ, also highlighted fears of a broader global slowdown. He noted that if global growth slips below 3%, oil consumption could fall by around 1%.
Further intensifying the uncertainty, US President Donald Trump raised tariffs on Chinese imports to 145% on Thursday, despite having recently eased tariffs on several other trade partners. China responded with additional levies on US goods.
The US Energy Information Administration (EIA) also cut its global growth forecasts, warning that extended trade disputes could significantly impact oil prices. As a result, it lowered its oil demand estimates for both the US and global markets for this year and next.
Looking ahead, all eyes are on the upcoming OPEC+ meeting scheduled for May 5. According to BMI analysts, this gathering could be pivotal. “The announcement of additional supply growth at the next meeting would likely be a trigger for a renewed selloff,” they warned.
Source: https://www.arabnews.com/node/2596648/business-economy