The price of the Brent crude oil grade declined by $1.01, or 1.5 per cent on Monday to $65.86 per barrel as economic worries from the US-China trade war pressured demand.
Also, the US West Texas Intermediate (WTI) crude was sold at $62.05 a barrel after it went down by 97 cents or 1.5 per cent amid conflicting signals from US President Donald Trump and the Chinese government over what progress was being made to de-escalate a trade war that could weaken global growth.
According to market analysts, the US-China trade war is dominating investor sentiment in moving oil prices, and has overshadowed other developments, including nuclear talks between the US and Iran and possible friction within the Organisation of the Petroleum Exporting Countries and its allies (OPEC+).
On Monday, China lashed out at the US’ negotiating tactics, with Zhao Chenxin, deputy director of the National Development and Reform Commission, saying: “They make up bargaining chips out of thin air, bully and go back on their words.”
The Chinese official was responding to President Trump’s statement earlier in the day that the US would not lower tariffs on China unless it offered up “something substantial”.
This came as US Treasury Secretary Scott Bessent on Sunday did not back President Trump’s assertion that negotiations with China were underway.
Amid this, crude oil inventories in China rose to the highest in almost three years in March, suggesting demand growth was lagging behind refinery processing rates, which hit a one-year high last month as Chinese oil processors took advantage of cheap Iranian and Russian crude.
It was reported that 1.74 million barrels daily went into storage last month in China, citing official data from China, making this the highest rate of storage inflows since June 2023.
Some OPEC+ members are expected to suggest that the group accelerate oil output hikes for a second consecutive month when they meet on May 5.
Earlier this month, there was an unexpected decision by OPEC+ to increase output by 411,000 barrels per day of oil in May, which was three times more than the group originally planned.