Oil prices dropped as traders reacted to U.S. economic data and monitored developments in President Trump’s trade war with China. West Texas Intermediate crude fell 1.5% to around $62 a barrel — a two-week low — amid broader market weakness and declining Texas manufacturing activity. U.S.
Treasury Secretary Scott Bessent stated that the U.S. is open to talks but expects China to initiate de-escalation. Meanwhile, Chinese officials pledged support for exporters hit by tariffs and denied any current trade discussions with Washington, expressing confidence in meeting a 5% economic growth target for 2025.U.S. crude is set for its steepest monthly drop since 2021, down over 13%, after hitting a four-year low.
The decline is driven by fears that the U.S.-led trade war will weaken economic growth and reduce energy demand, while OPEC+ has added pressure by increasing production. The group will meet on May 5 to review output for June. Markets are now looking to key U.S. economic data and earnings reports from major oil companies for direction.
Despite current bearish sentiment, BNP Paribas sees short-term crude strength due to low inventories but expects rising stockpiles and non-OPEC+ output to ease bullish pressure later in the year.Geopolitical developments impacted oil markets as the U.S. and Iran reported progress in nuclear talks and agreed to continue discussions in Europe.
Meanwhile, a deadly explosion at Iran’s Shahid Rajaee port, a key oil trade hub, added to tensions. In Europe, several Spanish oil refineries were shut down due to a widespread power outage. Oil prices declined, with WTI falling 1.5% to $62.05 and Brent dropping 1.5% to $65.86 per barrel.
