Oil prices declined further on Friday, heading for a second consecutive weekly loss as escalating trade tensions between the United States and China raised concerns about a slowdown in global economic growth and crude demand.
By 3:10 pm AEST (5:10 am GMT), Brent crude futures slipped $0.18 or 0.3%, to US$63.15 per barrel, while U.S. West Texas Intermediate (WTI) crude dropped $0.21 or 0.4%, to US$59.42.
For the week, Brent is on course to fall 4%, following an 11% loss last week. WTI is also down 3.8% this week, after an identical 11% decline in the previous period.
The extended dispute between the world’s two largest economies has cast a shadow over global trade and is expected to curb trade volumes and disrupt supply chains. As the U.S. and China are also the biggest consumers of crude oil, such frictions threaten to dent global energy demand.
The tariff dispute intensified this week after U.S. President Donald Trump confirmed a cumulative 145% tariff on Chinese imports - despite announcing a 90-day pause on new tariffs for other major trading partners just a day earlier.
In response, China announced new import levies, raising its tariffs on U.S. goods to 84%.
ANZ analysts warned in a note to clients: “If we assume world GDP growth of below 3%, our crude-oil model suggests global oil consumption will fall by 1%. Any softening of market balances would be exacerbated by OPEC’s plans to accelerate planned output hikes, as it tries to pressure members to adhere to quotas.”
Meanwhile, the U.S. Energy Information Administration (EIA) on Thursday lowered its global economic growth outlook and cautioned that the ongoing tariff conflict could significantly pressure oil prices. The agency also revised down its oil demand forecasts for both the U.S. and global markets for this year and next.
