Oil prices tumbled more than 3% Friday as renewed U.S.–China trade tensions overshadowed market fundamentals and revived fears of weaker global demand. Brent crude fell $2.49 (-3.82%) to $62.73, its lowest since May 5, while WTI dropped $2.61 (-4.24%) to $58.90, the lowest since early May. Both benchmarks marked their fourth straight daily decline.
U.S. President Donald Trump’s threat to sharply raise tariffs on Chinese goods weighed heavily on sentiment after Beijing expanded export controls on rare earth elements, escalating tensions ahead of a planned meeting with Chinese President Xi Jinping.
“The sell-off was driven by a shift to risk-off markets following Trump’s post threatening tariffs on Chinese goods,” said Giovanni Staunovo of UBS.
Analyst Andrew Lipow noted that tariff threats came on top of existing bearish pressures — including higher OPEC output, growing production from the Americas, and diminished geopolitical risk following the Gaza ceasefire deal.
The OPEC+ alliance’s modest November output hike helped limit the downside, though traders remained focused on oversupply risks as production continues to ramp up.
At the same time, investors fretted that a prolonged U.S. government shutdown could further slow economic growth and weaken oil demand in the world’s largest consumer.