Oil Updates - crude extends decline as US-China trade war weighs on global growth outlook

14/04/2025 09:23 AST

Oil prices fell on Monday on concerns the escalating trade war between the US and China would weaken global economic growth and dent fuel demand.

Brent crude futures were down 22 cents, or 0.34 percent, at $64.54 a barrel at 10:22 a.m. Saudi time. US West Texas Intermediate crude futures were trading at $61.28 a barrel, down 22 cents, or 0.36 percent.

Both contracts have lost about $10 a barrel since the start of the month as a trade war between the world's two largest economies has intensified.

Goldman Sachs expects Brent to average $63 and WTI to average $59 for the remainder of 2025 and sees Brent averaging $58 and WTI $55 in 2026.

It sees global oil demand in the fourth quarter of 2025 rising by just 300,000 barrels per day year-on-year, "given the weak growth outlook," analysts led by Daan Struyven said in a note, adding that the demand slowdown is expected to be the sharpest for petrochemical feedstocks.

Beijing increased its tariffs on US imports to 125 percent on Friday, hitting back against President Donald Trump's decision to raise duties on Chinese goods and raising the stakes in a trade war that threatens to upend global supply chains.

Trump on Saturday granted exclusions from steep tariffs on smartphones, computers and some other electronics largely imported from China, but US Commerce Secretary Howard Lutnick on Sunday said that critical technology products from China would face separate new duties along with semiconductors within the next two months.

The trade war has heightened worries that unsold exports could continue driving domestic Chinese prices down.

"Inflation data from China were a window into an economy that is not in shape for a trade fight. Consumer prices fell for a second month in a row in year-on-year terms, while producer prices chalked up their 30 percent straight fall," Moody's Analytics said in a weekly note, referring to data released on April 10.

As companies prepare for a possible decline in demand, US energy firms last week cut oil rigs by the most in a week since June 2023, lowering the total oil and natural gas rig count for a third consecutive week, according to Baker Hughes.

Potentially supporting oil prices, US Energy Secretary Chris Wright said on Friday that the US could stop Iran's oil exports as part of Trump's plan to pressure Tehran over its nuclear program.

Both countries held "positive" and "constructive" talks in Oman on Saturday and agreed to reconvene next week in a dialogue meant to address Tehran's escalating nuclear program, officials said over the weekend.

Reuters