U.S. crude oil prices remained steady on Monday after OPEC reduced its demand growth forecast for 2019 due to the impact of President Donald Trump’s tariffs on China.
U.S. crude oil rose by 3 cents, closing at $61.53 per barrel. Meanwhile, global benchmark Brent crude increased by 12 cents to settle at $64.88 per barrel.
In its monthly report, OPEC revised its demand growth forecast, now expecting an increase of 1.3 million barrels per day (bpd) this year and next year. This is about 150,000 bpd lower than its previous projection.
Earlier in the session, oil prices rose nearly 2% following President Trump’s decision to exempt key technology products, such as smartphones, from his tariffs on China. Trump has imposed a 145% tariff on China and temporarily suspended higher duties on most other countries for the next 90 days to allow for negotiations.
Oil prices also found some support after U.S. Energy Secretary Chris Wright suggested on Friday that Trump could block Iran’s oil exports if a deal was not reached regarding Iran’s nuclear program. The U.S. and Iran held talks in Oman on Saturday and plan to meet again on April 19.
Since Trump announced his tariff plans on April 2, U.S. crude has fallen by over 14%, while Brent has dropped more than 13%. Prices are also under pressure due to OPEC+’s decision to increase production starting in May.
Helima Croft, the global head of commodity strategy at RBC Capital Markets, told CNBC on Monday, “It’s a double whammy for the oil market right now.”
Goldman Sachs predicts that West Texas Intermediate and Brent crude will average $59 and $63 per barrel, respectively, for the rest of the year, according to a note published on Sunday.