Investing.com-- Oil prices traded largely unchanged Friday, but were heading for their second consecutive negative week as traders fretted over the impact of a rapidly escalating trade war between the U.S. and China.
At 08:05 ET (12:05 GMT), Brent oil futures expiring in June rose 0.2% to $63.47 a barrel, while West Texas Intermediate crude futures gained 0.2% to $60.20 a barrel.
Brent and WTI are poised to register weekly declines of around 3%, having both lost about 11% last week. Brent dipped below $60 a barrel at one point this week for its lowest since February 2021.
Trade war set to hit economic activity
Oil prices remained close to an over four-year low hit earlier this month, as concerns over slowing demand rose sharply in the face of increased U.S. trade tariffs.
While President Donald Trump did postpone plans to impose reciprocal tariffs against most countries by 90 days, he still proceeded with increased tariffs on China, up to a mammoth 145%.
Beijing decried the move, retaliating with its own tariffs, including lifting its import duties on U.S. goods earlier Friday to 125%.
Traders feared that a renewed U.S.-China trade war will hurt oil demand, especially given that China is the world’s biggest oil importer.
China is expected to ramp up its stimulus measures to offset the impact of Trump’s tariffs.
But softer-than-expected Chinese inflation data released on Thursday showed persistent pressure on the world’s second-largest economy.
Markets were also concerned over the economic impact on the U.S., given that the country still imports several Chinese goods which will be difficult to replace.
EIA slashes oil price outlook, sees softer demand
The U.S. Energy Information Administration on Thursday cut its oil demand forecasts through 2026, warning that tariffs were clouding the global economic outlook and could batter oil prices in the coming months.
The EIA also cut its oil price forecasts for 2025 and 2026, highlighting increased uncertainty in energy markets from fears of slowing growth.
The EIA cut its forecast of 2025 global oil demand growth by about 300,000 barrels-per-day to 900,000 bpd. It expects 2026 oil demand to rise by 1 million bpd, down from prior forecasts of 1.2 million bpd.
The EIA also expects Brent to average around $67.87 a barrel in 2025, down sharply from its prior forecast of $74.22 a barrel.
(Ambar Warrick contributed to this article.)