Oil Prices Continue to Decline Amid Trade War Concerns
West Texas Intermediate (WTI) and Brent futures are poised to end the week lower, approximately 2%, following the imposition of US tariffs on Chinese imports and China's retaliatory actions.
"Crude oil futures have inched up, but the overall trend remains bearish," said Dubai-based economist Hamza Zraimek. Trade tensions between the US and China have sparked fears of an economic slowdown, leading to concerns about reduced oil demand.
The anticipated call between President Trump and Chinese President Xi Jinping was canceled, dampening hopes for a swift agreement.
Trump's recent deal with Canada and Mexico to postpone tariffs has provided some relief, but a report from Reuters indicates he may announce reciprocal tariffs on American imports by Friday. This further raises concerns about slowing economic growth and reduced demand for oil.
Despite the threat of tariffs, supply concerns remain. Oil futures rose on Friday after the US imposed initial sanctions on Iranian oil exports. The sanctions target individuals, companies, and tankers involved in shipping oil to China.
While WTI has erased its gains from the start of the year, Brent remains marginally higher.