Oil on track for biggest monthly fall in three years
Trade war has eroded the outlook for fuel demand, while the fear of mounting supply adds more pressure
30 April 2025 - 08:12
bySiyi Liu
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Singapore — Oil prices extended declines on Wednesday and were set for their largest monthly drop in more than three years as the global trade war eroded the outlook for fuel demand, while fears of mounting supply also weighed.
Brent crude futures fell by 72c, or 1.12%, to $63.53 a barrel by 4.04am GMT. US West Texas Intermediate (WTI) crude futures dropped 70c, or 1.16%, to $59.71 a barrel.
Brent and WTI have lost 15% and 16%, respectively, so far this month, the biggest percentage drop since November 2021.
Both benchmarks slumped after US President Donald Trump’s April 2 announcement of tariffs on all US imports. They then sank further to four-year lows as China responded with its own levies against US imports, stoking a trade war between the top two oil-consuming nations.
Trump’s tariffs on imports into the US have made it probable the global economy will slip into recession this year, according to a Reuters poll.
China’s factory activity contracted at the fastest pace in 16 months in April, a factory survey showed on Wednesday.
Worry about demand amid the trade war had weighed on investor sentiment, said ANZ bank senior commodity strategist Daniel Hynes. “There are also concerns that recent strength in US economic data was only temporary, due to stockpiling ahead of the tariffs that now appears to be abating,” he added.
US consumer confidence slumped to a nearly five-year low in April on growing concern over tariffs, data showed on Tuesday.
Recent signs of a de-escalation in the trade wars, including a pair of orders Trump signed on Tuesday to soften the blow of his car tariffs, eased some jitters among global investors.
That said, analysts believe the oil market will stay under pressure as the Trump administration continues to prioritise lower oil prices to manage inflation.
Oil prices were also undermined by the fear of mounting supply from oil cartel Opec and their allies, known as Opec+.
Several Opec+ members would suggest a ramp-up of output hikes for a second consecutive month in June, sources told Reuters last week. The group will meet on May 5 to discuss output plans.
On the supply front, US crude oil inventories rose by 3.8-million barrels last week, market sources said on Tuesday, citing American Petroleum Institute data.
US government data on stockpiles is due at 2.30pm GMT on Wednesday. Analysts polled by Reuters expect, on average, a 400,000 barrel increase in US crude oil stocks for last week.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Oil on track for biggest monthly fall in three years
Trade war has eroded the outlook for fuel demand, while the fear of mounting supply adds more pressure
Singapore — Oil prices extended declines on Wednesday and were set for their largest monthly drop in more than three years as the global trade war eroded the outlook for fuel demand, while fears of mounting supply also weighed.
Brent crude futures fell by 72c, or 1.12%, to $63.53 a barrel by 4.04am GMT. US West Texas Intermediate (WTI) crude futures dropped 70c, or 1.16%, to $59.71 a barrel.
Brent and WTI have lost 15% and 16%, respectively, so far this month, the biggest percentage drop since November 2021.
Both benchmarks slumped after US President Donald Trump’s April 2 announcement of tariffs on all US imports. They then sank further to four-year lows as China responded with its own levies against US imports, stoking a trade war between the top two oil-consuming nations.
Trump’s tariffs on imports into the US have made it probable the global economy will slip into recession this year, according to a Reuters poll.
China’s factory activity contracted at the fastest pace in 16 months in April, a factory survey showed on Wednesday.
Worry about demand amid the trade war had weighed on investor sentiment, said ANZ bank senior commodity strategist Daniel Hynes. “There are also concerns that recent strength in US economic data was only temporary, due to stockpiling ahead of the tariffs that now appears to be abating,” he added.
US consumer confidence slumped to a nearly five-year low in April on growing concern over tariffs, data showed on Tuesday.
Recent signs of a de-escalation in the trade wars, including a pair of orders Trump signed on Tuesday to soften the blow of his car tariffs, eased some jitters among global investors.
That said, analysts believe the oil market will stay under pressure as the Trump administration continues to prioritise lower oil prices to manage inflation.
Oil prices were also undermined by the fear of mounting supply from oil cartel Opec and their allies, known as Opec+.
Several Opec+ members would suggest a ramp-up of output hikes for a second consecutive month in June, sources told Reuters last week. The group will meet on May 5 to discuss output plans.
On the supply front, US crude oil inventories rose by 3.8-million barrels last week, market sources said on Tuesday, citing American Petroleum Institute data.
US government data on stockpiles is due at 2.30pm GMT on Wednesday. Analysts polled by Reuters expect, on average, a 400,000 barrel increase in US crude oil stocks for last week.
Reuters
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