Oil Prices Retreat as Trade Tensions and Economic Worries Deepen

April 29, 2025 10:47 AM AEST | By Team Kalkine Media

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Oil Prices Retreat as Trade Tensions and Economic Worries Deepen — Image source: shutterstock

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Highlights

Oil prices drop sharply amid global economic concerns.

Trade tensions escalate as China responds to tariffs.

OPEC+ boosts production, adding pressure on oil markets.

Oil prices slid sharply as investors digested disappointing economic signals from the US and monitored the ongoing fallout from escalating trade tensions. West Texas Intermediate (WTI) crude, the US benchmark, retreated by 1.5% to close near $62 a barrel — its lowest settlement in almost two weeks.

The dip in oil prices coincided with weakness across US equity markets, notably among major technology companies. A key report revealed that Texas manufacturing activity had fallen to its weakest levels since May 2020, raising fresh concerns about the broader economic outlook.

Further weighing on market sentiment, comments from Treasury Secretary Scott Bessent indicated that while communication lines remain open between Washington and Beijing, expectations were firmly placed on China to take the initial steps to ease trade tensions. Meanwhile, Chinese authorities — representing the world's largest crude oil importer — pledged additional support measures for their exporters impacted by the ongoing tariff battle, while firmly rejecting reports of renewed negotiations with the US.

Amid these developments, US crude oil is on track for a monthly decline exceeding 13%, marking the steepest slump since 2021. Futures prices have been pressured by worries that the intensifying trade dispute could slow global economic growth and dampen energy demand.

Adding to the bearish mood, the OPEC+ alliance, which includes the Organization of the Petroleum Exporting Countries (OPEC) and its partners, has increased production by reviving previously idled capacity. This boost in supply has further exacerbated oversupply concerns, creating additional headwinds for oil prices.

The combination of sluggish economic data, trade war anxieties, and a surge in oil supply has created a challenging landscape for energy markets. Market participants are closely watching for any signs of resolution between the US and China, along with any changes in production strategy from OPEC+, as key drivers for future oil price movements.

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