Oil prices were stable on Friday but on track for their second weekly loss in a row against a backdrop of investor concern over the burgeoning trade war between the United States and China.

Brent crude futures were down 3 cents, or 0.05%, at $63.30 a barrel by 0827 GMT while U.S. West Texas Intermediate crude futures were up 2 cents, or 0.03%, at $60.09.

Brent and WTI are poised to register weekly declines of 3.5% and 3% respectively, having both lost about 11% last week. Brent dipped below $60 a barrel at one point this week for its lowest since February 2021.

China announced on Friday that it will impose a 125% tariff on U.S. goods from Saturday, up from the previously announced 84%, after U.S. President Donald Trump raised tariffs against China to 145% on Thursday.

Trump this week paused heavy tariffs against dozens of trading partners, but a prolonged dispute between the world’s two biggest economies is likely to reduce global trade volumes and disrupt trading routes, weighing on global economic growth and reducing demand for oil.

“It is a tariff-driven market influenced by the loss of confidence in transparent and succinct policymaking,” said PVM analyst Tamas Varga.

BMI analysts, meanwhile, “expect prices will remain under pressure as investors assess ongoing trade negotiations and rising tensions between Washington and Beijing”.

The U.S. Energy Information Administration on Thursday lowered its global economic growth forecasts and warned that tariffs could weigh heavily on oil prices. It reduced its U.S. and global oil demand forecasts for this year and next year.

China’s 2025 economic growth is expected to fall relative to last year’s pace, a Reuters poll showed, as U.S. tariffs raise pressure on the world’s top oil importer.

ANZ Bank analysts forecasts oil consumption to decline by 1% if global economic growth falls below 3%, said senior commodity strategist Daniel Hynes.
Source: Reuters