Brent and WTI are now down roughly 15% and 16%, respectively, for the month, marking their steepest monthly declines since late 2021. The slide follows a series of tariff announcements by U.S. President Donald Trump that triggered a new round of trade hostilities with China. As the world’s two largest oil consumers exchange retaliatory duties, traders are pricing in lower demand prospects and greater risk of a global economic slowdown.
At 10:56 GMT, Light Crude Oil Futures are trading $59.86, down $0.56 or -0.93%.
China factory data fuels bearish sentiment on demand outlook
China’s official manufacturing PMI dropped sharply to 49.0 in April, its lowest level since December 2023, confirming a contraction in industrial output. The new export orders index fell to its weakest reading since April 2012—excluding pandemic disruptions—underscoring the immediate toll from the trade war. Despite government pledges for more fiscal support, analysts warn that stimulus may not be sufficient to offset declining external demand.
The yuan edged lower after the release, reflecting concerns that Beijing’s economic rebalancing efforts may struggle to counteract the hit from falling exports. Analysts now expect China’s economy to expand by just 3.5% this year, a downgrade from previous estimates. With China being a critical pillar of global oil demand, these data points are reinforcing a bearish sentiment across energy markets.
Supply side risk grows with OPEC+ and U.S. builds
On the supply front, bearish momentum is amplified by rising output from both OPEC+ and the U.S. market. Several OPEC+ members are reportedly pushing for another output hike in June, as internal cohesion becomes a priority over price support.
At the same time, the American Petroleum Institute reported a 3.8 million barrel build in crude inventories last week. U.S. Energy Information Administration (EIA) data due later today is expected to show a smaller 400,000 barrel increase, but the divergence in estimates adds uncertainty.
