Crude oil down on Tuesday

Crude oil prices fell on Tuesday as escalating US-China trade tensions dampened demand growth expectations. Brent crude futures dropped 44 cents, or 0.7 per cent, to $65.42 per barrel by 0400 GMT, while US West Texas Intermediate (WTI) crude declined 40 cents, or 0.6 per cent, to $61.65. Both benchmarks lost more than $1 on Monday.

Analysts warned that worsening trade relations between the world’s two largest economies could push the global economy into recession, further clouding oil demand prospects. “The lack of confidence in future demand and the absence of concrete signals for demand revival in mainland China will continue to overshadow oil prices,” said Priyanka Sachdeva, senior market analyst at Phillip Nova.

Barclays cut its 2025 Brent forecast by $4 to $70 a barrel, citing persistent trade tensions and an anticipated 1 million barrel per day surplus driven by changes in OPEC+ production strategies. Some OPEC+ members are reportedly considering accelerating output hikes for a second straight month in June, heightening the risk of further price declines.

Meanwhile, a preliminary Reuters poll indicated US crude inventories likely rose by about 500,000 barrels last week, with official data due later this week.

Attribution: Reuters

Subediting: M. S. Salama