Oil prices remain steady as the ongoing US-China trade conflict continues to impact the global growth forecast. Oil prices remained steady in early trading on Monday, amid rising concerns that the intensifying trade conflict between the United States and China could hinder global economic growth and negatively impact fuel demand. Brent crude futures experienced a slight increase of 4 cents, or 0.06%, reaching $64.80 a barrel as of 0009 GMT. West Texas Intermediate crude futures in the U.S. are currently priced at $61.53 per barrel, reflecting an increase of 3 cents, or 0.05%.
On Friday, Beijing announced a significant escalation in its trade tensions with the United States by raising tariffs on U.S. imports to 125%. This move is a direct response to President Donald Trump’s recent decision to increase duties on Chinese goods, intensifying a trade conflict that poses risks to global supply chains. On Saturday, former President Trump announced exemptions from high tariffs on smartphones, computers, and various other electronics primarily sourced from China. However, U.S. Commerce Secretary Howard Lutnick indicated on Sunday that essential technology products from China would be subject to additional new duties, alongside semiconductors, within the upcoming two months.
Concerns are mounting as the ongoing trade war exacerbates the situation, with unsold exports potentially leading to further declines in domestic prices in China. “Recent inflation data from China reveals an economy that appears unprepared for a trade confrontation.” In a recent weekly note, Moody’s Analytics reported that consumer prices have declined for the second consecutive month on a year-on-year basis, while producer prices have experienced their 30th consecutive decrease, as indicated by data released on April 10.
In a strategic response to anticipated demand fluctuations, U.S. energy companies have significantly reduced the number of oil rigs, marking the largest weekly decline since June 2023. This reduction has contributed to a third consecutive week of decreased total oil and natural gas rig counts, as reported by Baker Hughes. In a move that could bolster oil prices, U.S. Energy Secretary Chris Wright announced on Friday that the United States may halt Iran’s oil exports as part of a strategy to exert pressure on Tehran regarding its nuclear program. Officials reported that the two nations engaged in “positive” and “constructive” discussions in Oman on Saturday, with plans to reconvene next week for further dialogue aimed at addressing Tehran’s escalating nuclear program.