Oil Declines On Fear Trade War Will Weaken Global Energy Demand
Oil fell as President Donald Trump stepped up his criticism of Jerome Powell over monetary policy, rattling financial markets and as concerns about energy demand swell due to a growing trade war between the US and China.
West Texas Intermediate futures slid as much as 3.5% to trade near $63 a barrel, the biggest intraday decline in almost two weeks. Oil demand worries returned to the forefront as China warned countries against striking deals with the US that could hurt Beijing's interests, while Japan's Prime Minister Shigeru Ishiba said his country won't concede to all US demands.
Broader financial markets carried a risk-off tone on Monday, hurting many commodities. A gauge of the dollar fell to the lowest since December 2023 and US stock-index futures retreated after Trump threatened to fire Federal Reserve Chairman Jerome Powell.
Trading volumes trended lower in Monday's session, with some countries observing holidays to mark Easter and as the May WTI futures contract approached its Tuesday expiry.
“Oil looks like it's taking a leg lower on general risk-off moves,” said Ed Bell, head of research at Dubai lender Emirates NBD Pjsc. “The prevailing mood around oil still looks negative,” he said, citing lower demand outlooks and global growth forecasts.
Elsewhere, Iran's foreign minister said his country had a “better understanding” with the US on a range of principles after talks Saturday on Tehran's nuclear program. The discussions, which lasted for more than three hours, will resume Wednesday in Oman, and have the potential to affect Iranian crude supplies.
Oil has declined sharply this month, touching a four-year low at one point, driven by investors' fears that the onslaught of tariffs and counter-levies between the US and its biggest trading partners will sap crude demand. The drop has been compounded by the OPEC+ alliance's decision to bring back production at a faster-than-expected pace, reviving concerns about a supply glut.
Prices
WTI for May delivery fell 2.6% to $62.98 a barrel as of 10:54 a.m. in New York.
The more-active June contract traded at $62.34.
Brent for June settlement traded 2.6% lower at $66.20 a barrel.
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