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Oil prices continued their sharp decline on Wednesday, deepening a rout that has pushed both Brent and WTI crude toward their worst monthly performance in over three years.
- Brent crude fell 72 cents (-1.12%) to $63.53 per barrel (as of 04:04 GMT).
- WTI crude dropped 70 cents (-1.16%) to $59.71 per barrel.
So far in April, Brent and WTI have fallen 15% and 16% respectively — their largest monthly percentage drops since November 2021.
Global Trade War Crushing Demand Outlook
Crude markets have been under relentless pressure since President Donald Trump announced sweeping tariffs on all U.S. imports on April 2, a move that stunned global markets.
- China swiftly retaliated, sparking a full-scale trade war between the world’s top two oil consumers.
- As a result, demand forecasts have plummeted.
Latest data highlights the damage:
- China’s factory activity shrank at its fastest pace in 16 months in April.
- U.S. consumer confidence fell to a near five-year low on Tuesday, amid growing concerns over tariff-induced inflation.
Short-Lived Optimism on Tariff Easing
While Trump signed executive orders this week to ease the impact of auto tariffs, and claimed that trade talks were progressing, the lack of clear commitments from China has kept markets on edge.
Most analysts remain skeptical that recent softening in rhetoric will be enough to reverse the demand hit already underway.
OPEC+ Supply Concerns Add Pressure
Compounding the demand outlook are concerns that OPEC+ may raise output again:
- Sources told Reuters last week that multiple members of the alliance will propose another production hike in June, following the surprise boost in May.
- The group is scheduled to meet on May 5.
This has raised alarms about a potential supply glut, particularly as demand is weakening.
U.S. Inventories Rise Sharply
Adding further bearish pressure:
- U.S. crude inventories rose by 3.8 million barrels last week, according to data from the American Petroleum Institute.
- Official stockpile data from the Energy Information Administration (EIA) is due later today and will be closely watched.
Summary
- Oil prices are on track for their biggest monthly loss in over three years.
- Global demand fears, fueled by the U.S.-China trade war, are the central bearish driver.
- Rising inventories and potential OPEC+ supply increases are deepening the downside pressure.
- Even with minor tariff adjustments from Trump, the market remains unconvinced of a true resolution.
