Oil Incurs Weekly Loss As Tariff Fatigue Stokes Bearish Sentiment

Meanwhile, the EIA lowers 2025's global oil demand estimate: File Image/Pixabay

Washington's efforts to end Iran's oil exports saved the day for crude prices on Friday after almost a week of steady and steep losses due to tariff concerns; however, China imposing new counter tariffs on the U.S. merely served to stoke ongoing demand concerns.

Brent settled up $1.43 at $64.76 per barrel, and West Texas Intermediate also settled up $1.43 at $61.50 per barrel; for the week, Brent was on course for a 2 percent loss.

The prospect of thinning – or at least less voluminous – global oil supplies was kindled when U.S. energy secretary Chris Wright stated that Washington could stop Iran's oil exports in order to persuade the Islamic republic to abandon its nuclear weapons programme.

Meanwhile, China on Friday imposing a 125 percent tariff on U.S. goods effective Saturday was in retaliation for U.S. president Donald Trump raising tariffs against Beijing to 145 percent earlier in the week, with the brash billionaire vowing not to relent until China was willing to negotiate a new  trading deal.

Despite Trump suspending all new tariffs on other countries whose leaders expressed amenability to negotiate more equitable trading deals with him, analysts overall were bearish about the impact this would have: "The market damage had already been inflicted, leaving prices struggling to regain stability," said Ole Hansen, head of commodity strategy at Saxo Bank.

ANZ Bank forecast that oil consumption will decline by 1 percent if global economic growth falls below 3 percent.

Not to be outdone, the U.S. Energy Information Administration estimated that worldwide oil consumption will grow by about 900,000 barrels per day (bpd) this year, about 400,000 barrels lower than last month's estimate.

But falling oil prices didn't seem to faze Wright, w,ho said the U.S. shale industry "is going to survive and thrive" in coming years; he added, "of course investment decisions are going to be tailored if prices stay long for stay this low for a long period of time, but I'm quite bullish on the U.S. industry."

Wright pointed out that, "In 2015 and 2016 oil prices twice hit $28 [per barrel], and what happened? What did the U.S. shale industry do in that time — innovate, get smarter, drive their costs down, and that's what's happening right now."