- Oil benchmarks fall after Trump hikes China tariffs to 125%.
- Crude inventories rise more than expected, adding supply pressure.
- Keystone pipeline remains shut after North Dakota spill.
- Market volatility remains high as trade and supply concerns collide.
Oil Prices Fall 1% as Trump Intensifies Tariffs on China; Inventory Build and Pipeline Disruption Add Pressure
Oil prices edged lower on Thursday as escalating tensions between the U.S. and China rattled global markets once again. Despite a temporary 90-day tariff pause for countries outside the crosshairs, President Donald Trump increased tariffs on Chinese imports to 125%, deepening an already fraught trade standoff. China swiftly responded with an 84% retaliatory tariff on U.S. goods, sending fresh shockwaves across the energy sector.
Brent crude futures slipped 73 cents, or 1.1%, to settle at $64.73 a barrel in early Thursday trading, while U.S. West Texas Intermediate (WTI) crude futures dropped 49 cents, or 0.8%, to $61.86. This decline follows a volatile Wednesday session that saw oil surge 4% after a 7% plunge earlier in the day.
The heightened tariff battle added downward pressure on oil demand forecasts, as analysts expect prolonged trade tensions to weigh heavily on global economic activity and fuel consumption.
Meanwhile, supply-side factors also played a role in market jitters:
- U.S. crude inventories rose by 2.6 million barrels for the week ending April 4, significantly above the 1.4 million barrel rise forecasted by analysts in a Reuters poll, according to the Energy Information Administration (EIA). The surprise inventory build underscored concerns of oversupply amid softening demand.
- The Keystone pipeline, a key conduit for Canadian crude into the United States, remained shut on Wednesday following an oil spill near Fort Ransom, North Dakota. Operator South Bow confirmed that plans to return the pipeline to service are still under evaluation. The disruption, while potentially bullish for prices, was overshadowed by trade-related fears.
Energy traders are now bracing for continued volatility as geopolitical risks and macroeconomic headwinds dominate sentiment.
For investors, analysts, and energy executives alike, the coming weeks are expected to be defined by tariff announcements, diplomatic tit-for-tats, and data from the oil market’s supply-demand balance.
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