Oil prices were little changed on Tuesday as investors weighed U.S. President Donald Trump’s shifting tariff policies and their potential impact on global economic growth and oil demand.
Brent crude futures fell 21 cents, or 0.3%, to settle at $64.67 a barrel. U.S. West Texas Intermediate (WTI) crude dropped 20 cents, also 0.3%, closing at $61.33. Uncertainty from U.S. trade moves has unsettled oil markets, leading the Organization of the Petroleum Exporting Countries (OPEC) to lower its demand forecast on Monday.
The International Energy Agency (IEA) added on Tuesday that it expects global oil demand in 2025 to grow at the slowest rate in five years, mainly due to concerns over the U.S.-China trade war.
Several banks, including UBS, BNP Paribas, and HSBC, have cut their crude price forecasts. UBS analyst Giovanni Staunovo warned that a deeper U.S. recession and a hard landing in China could push Brent crude down to $40-60 per barrel in the coming months.
Fears over tariffs and an increase in supply from OPEC+ — a group including OPEC and allies like Russia — have already dragged oil prices down about 13% this month.
Oil prices found some support after Trump said Monday he might adjust the 25% tariffs on imported autos from Mexico and other countries. However, analysts at Gelber and Associates noted the U.S. administration’s shifting trade policies have created more uncertainty, citing changes like temporary exemptions for electronics and modifications to auto tariffs.
In the United States, bank executives warned that prolonged trade tensions could hurt consumer spending. Meanwhile, import prices unexpectedly fell in March, mainly because of lower energy costs, suggesting inflation was easing even before new tariffs were implemented.
Some analysts worry that tariffs could eventually push inflation higher, making it harder for the U.S. Federal Reserve to cut interest rates. Central banks typically raise rates to fight inflation, a move that can slow down economic growth and reduce energy demand.
Despite Trump’s support for increased oil drilling, the U.S. Energy Information Administration (EIA) said U.S. oil production is expected to peak at 14 million barrels per day in 2027 and stay there until 2030 before declining sharply.
The American Petroleum Institute was set to release U.S. oil inventory data later on Tuesday, followed by the EIA’s report on Wednesday. Analysts predicted a drawdown of about 1.0 million barrels for the week ending April 11, compared with a 2.7 million-barrel build in the same week last year and a five-year average build of 4.2 million barrels.
In China, exports surged in March as factories rushed to ship goods before new U.S. tariffs hit. Still, the escalating trade war has darkened prospects for economic growth. Premier Li Qiang urged exporters to find new markets and promised to boost domestic consumption to counter external shocks.
In Europe, the European Central Bank reported that some banks tightened credit last quarter and expected to continue doing so because of concerns over the economic impact of U.S. tariffs.
In Germany, investor confidence suffered its sharpest fall since Russia’s invasion of Ukraine in 2022, driven by growing uncertainty over trade tensions with the United States.
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