Prices of crude oil decline yesterday, amid volatility in the global commodity market as a result of an imbalance in demand and supply. The disequilibrium condition in the global market appears to be multidimensional the Organisation of Petroleum Exporting Countries and allies ,OPEC+, is ramping up production despite weak demand outlook in China and tariff policy concerns.
The Russia and Ukraine war is affecting both demand and supply of crude oil, while Israel’s activities in the Middle East continue to impact the market. Oil prices posted a modest decline on Friday, pressured by these concerns over global demand and persistent geopolitical risks.
Despite the dip, prices remained supported by recent developments, including the resumption of US-China trade talks and ongoing tensions between Russia and Ukraine.
International benchmark Brent crude increased by around 0.04%, trading at $65.03 per barrel, up from $65 at the previous session’s close while US benchmark West Texas Intermediate ,WTI, inched up 0.06% to $62.64 per barrel from $62.60 in the previous session.
Supply-side uncertainty also mounted amid reports of potential new US sanctions on Russia and stalled nuclear negotiations with Iran. OPEC+ supported market direction by deciding to increase output in July in line with market expectations.
Meanwhile, signals of slowing global economic activity, coupled with weak macroeconomic data from the US and China, continued to weigh on the demand outlook. In particular, the significant rise in US petroleum product inventories added to concerns over demand-side uncertainty.
Elsewhere, a phone call held on Thursday between US President Donald Trump and Chinese President Xi Jinping revived hopes of renewed momentum in trade talks. However, markets remain cautious in anticipation of a lasting agreement, with the possibility of new US tariffs still on the table.
In a separate development that stirred market sentiment, tensions between Trump and Tesla CEO Elon Musk also drew attention, following Musk’s criticism of proposed tax legislation.
