Oil prices gave away gains as a US court reinstated Trump’s tariffs
Investors remain wary that OPEC+ countries might hike output after Saturday’s meeting.
The uncertain global growth scenario is undermining Oil demand expectations.
WTI Oil prices reversed gains on Thursday, after the US Court of Appeals reversed a sentence from a lower court to block Trump's trade tariffs. The decision brought trade uncertainty back to the table, casting doubts about global demand for Oil.
The US administration maintains contacts with trade partners to cut “beautiful deals,” but with no substantial progress so far. The negotiations with Japan are drawing out long, and talks with China seem to have stalled. The lack of good news is adding pressure on Crude prices.
Oversupply concerns keep upside attempts limited
Beyond that, OPEC+ countries are expected to meet on May 31 and will probably agree to increase supply by 411,000 barrels per day from July. In the context of restricted trade and a highly likely slowdown in global growth, markets are fearing an oil glut.
Macroeconomic data from the US and the Eurozone support that view. US GDP contracted in the first quarter by 0.2%, with consumer spending declining. Businesses and consumers seem to be delaying their purchasing decisions, wary of Trump’s erratic trade policies.
In Germany, unemployment figures revealed higher-than-expected layoffs in April, and retail sales declined unexpectedly, revealing the soft momentum of the Eurozone’s major economy.
On the positive side, the US Energy Information Administration reported that crude stocks fell last week by 2.8 million barrels, against expectations of a 1 million increase, which provided some support to prices.
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