Oil prices declined by 2.5% after a brief rally, as market concerns over the U.S.-China trade war returned. Brent crude slipped below $64 a barrel, while WTI hovered near $61, following a short-lived rebound sparked by President Trump’s announcement of a 90-day pause on certain tariffs. However, he also sharply increased duties on Chinese imports to 125%, prompting Beijing to retaliate with an 84% tariff on U.S. goods.
The ongoing trade conflict has fueled fears of a global economic slowdown, weakening oil demand—especially from China, the world’s top oil importer. Domestic fuel use there has already declined due to a prolonged property crisis and the rise of electric vehicles.
Adding to bearish sentiment, U.S. crude inventories rose by 2.6 million barrels last week, nearly double analysts’ forecasts. Meanwhile, OPEC+ is loosening production curbs more quickly than expected, raising concerns about oversupply.
Market analysts warn that the current downturn could persist, especially with China’s economic indicators showing continued weakness and key parts of the oil futures curve remaining in contango—an indication of bearish expectations.