Oil Prices Drop Amid Trade Tensions
(MENAFN) Crude oil values declined once again on Wednesday, pressured by growing anxieties over weakened consumption, largely driven by escalating trade tensions between the United States and China—the globe’s two largest petroleum importers.
Additionally, increasing speculation regarding an oversupply of crude has deepened market pessimism.
Brent crude, the international standard, dipped approximately 1.09 percent, trading at USD62.31 per barrel at 10:34 a.m. local time (0734 GMT), marking a drop from the previous session's closing rate of USD63.
Meanwhile, the American benchmark, West Texas Intermediate (WTI), fell by around 1.25 percent, reaching USD59.19 per barrel, lower than its last close of USD59.94.
Both price indices hit their lowest levels in four years on April 9, following a steep decline sparked by "US President Donald Trump's April 2 announcement of new tariffs on imports from key trade partners" and "China's swift retaliation."
Although there has been some "modest optimism" driven by recent mutual gestures in trade discussions, persistent changes in "tariff rhetoric" have sustained investor apprehension over a prolonged slowdown in global economic activity.
Intensifying fears over diminished consumption and the possibility of an oversaturated market have led crude prices to one of their steepest monthly drops since November 2021, with both Brent and WTI losing over 16 percent.
To add to the pressure, the Organization of the Petroleum Exporting Countries (OPEC) and allied producers—referred to as OPEC+—are anticipated to increase their output in June.
This expected boost in supply is further amplifying concerns of an expanding market surplus.
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