NEW YORK: Oil prices were little changed on Tuesday as investors digested the latest headlines on US President Donald Trump’s on-again, off-again tariffs and tried to figure how much the US-China trade war could reduce global economic growth and oil demand.
Brent crude futures fell 11 cents, or 0.2%, to $64.77 per barrel at 10:34 a.m. EDT (1434 GMT), while US West Texas Intermediate (WTI) crude fell 12 cents, or 0.2%, to $61.41.
Vacillating US trade policies have created uncertainty for global oil markets and prompted the Organization of the Petroleum Exporting Countries to lower its demand outlook on Monday.
The International Energy Agency followed on Tuesday with its projection that global oil demand in 2025 will grow at its slowest rate for five years due again to worries about economic growth from Trump’s trade tariffs.
That trade tariff uncertainty has caused several banks, including UBS, BNP Paribas and HSBC, to cut their crude price forecasts for this year and next.
“Should the trade war further escalate, our downside risk scenario case — i.e., a deeper US recession and a hard landing in China — could see Brent trading at $40-60/bbl over the coming months,” said UBS analyst Giovanni Staunovo.
Worries about Trump’s tariffs, along with a supply hike by OPEC+, have already caused oil prices to plunge by roughly 14% so far this month. OPEC+ includes OPEC and its producing allies, including Russia.
Oil prices gained some support, along with US equity markets, after Trump said on Monday he was considering a modification to the 25% tariffs imposed on foreign auto imports from Mexico and other places. In China, the world’s second biggest economy behind the US, exports rose sharply in March after factories rushed out shipments before the latest US tariffs took effect, but an escalating Sino-US trade war has darkened the outlook for factories and economic growth.
China’s Premier Li Qiang called on the country’s exporters on Tuesday to diversify their markets to cope with “profound” external changes, and vowed to support more domestic consumption.
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