The global oil market has faced sharp swings due to geopolitical tensions, economic shifts, and changing energy demand. After the COVID-19 pandemic caused major disruptions, new challenges like trade disputes and policy changes continue to shape crude oil prices and market dynamics.
Oil prices continued their downward trend on Wednesday and posted their biggest monthly decline by the end of April since late 2021. Brent crude futures went down by 49 cents, or 0.8%, to $63.76 a barrel, and U.S. West Texas Intermediate (WTI) crude futures slid 40 cents, or 0.7%, to $60.02 a barrel. Both Brent and WTI have fallen around 15% and 16%, respectively, over the month. The slide is a product of both supply and demand issues in the global oil market.
The price of oil fell after increasing signs of renewed trade tensions between the world's two biggest economies. On April 2, US President Donald Trump imposed tariffs on all US imports, triggering China's rapid response. The moves have escalated worries that the world economy is slowing down, which could drag down oil demand.
The trade tensions have reverberated through economic measures. China's factory activity shrank at the quickest pace in 16 months in April, in a sign that industrial demand was crumbling. US consumer confidence has plummeted to a near 5-year low, highlighting economic pressure.
The investors remained skeptical despite some measures taken by the Trump administration to soften the impact of auto tariffs. Oil prices were also driven down by increased supply fears as sources close to the Organization of the Petroleum Exporting Countries and its allies (OPEC+) reported that several members may support another round of production increases in June.
Adding to the supply-side concerns, American crude oil inventories increased by 3.8 million barrels in the most recent week, the American Petroleum Institute said. Analysts expect official data to report a smaller increase of around 400,000 barrels, though the overall trend of increasing inventories points to weak domestic demand.
