Oil prices dipped during Wednesday's Asian session, with investors weighing the escalating United States-China tariff dispute and its potential drag on economic growth and global energy demand.
By 3:30 pm AEST (5:30 am GMT), Brent crude futures slipped by $0.29, or 0.5%, to $64.38 per barrel, while U.S. West Texas Intermediate (WTI) crude declined by $0.31, also 0.5%, to $60.44 per barrel.
The drop in oil prices followed the International Energy Agency’s (IEA) latest outlook, which slashed its global demand growth forecast for 2025. The agency now expects demand to rise by only 730,000 barrels per day - its slowest pace in five years - citing trade tensions and a weakening macroeconomic backdrop.
The IEA attributed the lower demand forecast to slowing economic activity, particularly in the U.S. and China, which are at the centre of the ongoing trade war. “A growing sense of a global economic downturn is also weighing on sentiment,” noted ANZ analysts. “The IEA also expects consumption growth to be even slower in 2026 at 690kb/d due to a fragile macroeconomic environment. It also said the rising use of EVs is impacting demand.
"This comes after the Energy Information Administration and OPEC both reduced their forecasts for demand this year.”
Rising supply from OPEC+, which includes Russia and other allied producers, is also contributing to the bearish sentiment in oil markets.
Meanwhile, weekly inventory data added further complexity. According to the American Petroleum Institute, U.S. crude oil stocks rose by 2.4 million barrels in the week ended April 11, well above market expectations of a 1.68 million barrel draw.
