Oil futures also found support from OPEC’s announcement that countries such as Iraq and Kazakhstan plan to deepen output cuts to compensate for exceeding previous quotas.

Weekly U.S. inventory data from the Energy Information Administration showed crude stocks rose by 515,000 barrels to 442.9 million, while gasoline and distillate inventories fell. The crude build was slightly above analysts’ expectations for a 507,000-barrel increase.

Prices pulled back slightly after U.S. Federal Reserve Chair Jerome Powell warned that the size of recent tariff increases could have larger-than-expected economic effects, including higher inflation and slower growth. The IEA said on Tuesday that global oil demand growth this year is expected to be the weakest since 2020.

Tensions between the U.S. and China remain elevated. Beijing has responded to recent tariff hikes with retaliatory duties. According to Bloomberg, China is seeking more respect from Washington before it agrees to resume trade talks. Analysts say de-escalation could ease pressure on oil demand.

Several banks, including UBS, BNP Paribas, and HSBC, have lowered oil price forecasts amid the tariff uncertainty. UBS estimated that if global GDP growth slows by 15%—similar to the impact of the 2018–2019 trade war—oil demand growth could drop to 600,000 barrels per day in 2025, about half of pre-tariff expectations.

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Volatile trade headlines have weighed on market sentiment. The Organization of the Petroleum Exporting Countries (OPEC) cut its demand outlook on Monday, followed by the International Energy Agency on Tuesday, which projected the slowest global oil demand growth in five years. Several banks—including UBS, BNP Paribas, and HSBC—lowered their oil price forecasts in response to the deepening U.S.-China trade conflict.

UBS warned that if the trade war intensifies, Brent prices could drop to between $40 and $60 a barrel. Oil has already fallen roughly 13% this month amid tariff concerns and increased output from OPEC+.

Trump said Monday he is considering adjustments to the 25% tariffs on foreign auto imports from Mexico and other countries, providing a slight boost to prices. Still, analysts noted the series of tariff announcements—some rolled back, others revised—has heightened investor uncertainty.

In the U.S., bank executives cautioned that ongoing tariff disruptions could weigh on consumer spending. March import prices unexpectedly fell due to lower energy costs, but analysts remain concerned that tariffs could ultimately push inflation higher, complicating future interest rate decisions by the Federal Reserve.

Despite the administration’s support for drilling, the U.S. Energy Information Administration forecast domestic oil production will peak at 14 million barrels per day by 2027, plateau, and then decline later in the decade.

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In China, crude oil imports in March rose sharply from the previous two months, climbing nearly 5% year-over-year, helped by increased Iranian shipments and a recovery in Russian deliveries. Still, Brent and WTI prices remain down roughly $10 per barrel since the start of the month, as analysts revise price forecasts in response to escalating tensions between Washington and Beijing. In its monthly report, OPEC lowered its global oil demand growth estimate for 2025 by 150,000 barrels per day, citing trade tariffs as a contributing factor.

Goldman Sachs now expects Brent to average $63 and WTI $59 for the remainder of 2025, dropping to $58 and $55, respectively, in 2026. UBS cut its Brent forecast by $12 to $68, while JPMorgan cited weaker demand and higher OPEC+ production in its downward revisions. Analysts at BMI noted the Brent futures curve has shifted into contango, suggesting supply is expected to outpace demand in the months ahead. Elsewhere, U.S. Energy Secretary Chris Wright reiterated that the U.S. may move to halt Iranian oil exports as part of ongoing nuclear negotiations, which saw “positive” talks between the two countries over the weekend in Oman. Also weighing on the market, the Keystone pipeline operator announced a controlled restart on Monday following a shutdown last week due to an oil leak.

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Jobs Update

• Initial jobless claims seasonally adjusted for the week ending April 10th came in at 223,000, up 4,000 people week-over-week.

• Continuing jobless claims came in at 1.85 million people, versus the adjusted number of 1.893 million people from the week prior, down 43,000 people week-over-week.

Stocks closed higher on Friday of last week and higher week over week

The DOW closed higher on Friday of last week, up 619.05 points (1.56%) and closing out the week at 40,212.71, up 1,897.85 points week-over-week. The S&P 500 closed higher on Friday of last week, up 95.31 points, and closed out the week at 5,363.36, up 289.28 points week-over-week. The NASDAQ closed higher on Friday of last week, up 337.14 points (2.16%), and closed out the week at 16,724.46, up 1,136.67 points week-over-week.

The markets had yet another wild ride last week.  People are finding it hard to figure out what is going to be tariffed and what wont.  In the latest, it seems smartphones and computers are among many tech devices and components that will be exempted from reciprocal tariffs imposed by President Trump, according to new guidance from U.S. Customs and Border Protection.

The guidance, was issued late Friday evening, comes after Trump earlier imposed 145% tariffs on products from China.  Apple should be happy!

The guidance also includes exclusions for other electronic devices and components, including semiconductors, solar cells, flat panel TV displays, flash drives, and memory cards.

These products could eventually be subject to additional duties, but they are likely to be far lower than the 145% rate that Trump had imposed on goods from China.  We know everybody is watching this one!

In overnight trading, DOW futures traded higher and are expected to open at 40,756 this morning up 357 points from Friday’s close.

Crude oil closed higher on Friday of last week, but lower week over week.

West Texas Intermediate (WTI) crude closed up $1.43 per barrel (2.38%), to close at $61.50 per barrel on Friday of last week, down $5.45 per barrel week over week. Brent traded up $1.43 USD per barrel (2.26%) on Friday of last week, to close at $64.76 per barrel, down $5.38 per barrel week-over-week.

One Exchange WCS (Western Canadian Select) for May delivery settled on Friday of last week at US$9.85 below the WTI-CMA (West Texas Intermediate – Calendar Month Average). The implied value was US$49.63 per barrel.

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 2.6 million barrels week-over-week. At 442.3 million barrels, U.S. crude oil inventories are about 5% below the five-year average for this time of year.

Total motor gasoline inventories decreased by 1.6 million barrels week-over-week and are the same as the five-year average for this time of year.

Distillate fuel inventories decreased by 3.5 million barrels week-over-week and are 9% below the five-year average for this time of year.

Propane/propylene inventories increased by 1.5 million barrels week-over-week and are 5% below the five-year average for this time of year

Propane prices closed at 88 cents per gallon on Friday of last week, down 3 cents per gallon week-over-week, and up 5 cents per gallon year-over-year.

Overall, total commercial petroleum inventories increased by 1.2 million barrels during the week ending March 28, 2025.

U.S. crude oil imports averaged 6.2 million barrels per day during the week ending April 4, 2025, a decrease of 277,000 barrels per day week-over-week. Over the past four weeks, crude oil imports averaged 6.1 million barrels per day, 6.9% less than the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) averaged 778,000 barrels per day, and distillate fuel imports averaged 69,000 barrels per day during the week ending April 4, 2025.

U.S. crude oil exports averaged 3.244 million barrels per day during the week ending April 10, 2025, a decrease of 637,000 barrels per day week-over-week. Over the past four weeks, crude oil exports averaged 4.095 million barrels per day.

U.S. crude oil refinery inputs averaged 15.6 million barrels per day during the week ending April 4, 2025, which was 69,000 barrels per day more week-over-week.

WTI is poised to open at $62.10, up 60 cents per barrel from Friday’s close.

North American Rail Traffic

Week Ending April 9, 2025.

Total North American weekly rail volumes were up (8.37%) in week 15, compared with the same week last year. Total carloads for the week ending on April 9 were 351,595, up (5.51%) compared with the same week in 2024, while weekly intermodal volume was 339,029, up (11.5%) compared to the same week in 2024. 

8 of the AAR’s 11 major traffic categories posted year-over-year increases. The largest increase came from Coal, which was up (24.71%) while the largest decrease was from Petroleum and Petroleum Products, which was down (-6.08%)

In the East, CSX’s total volumes were up  (7.14%), with the largest decrease coming from Grain (-15.89) while the largest increase came from Other (15.22%). NS’s volumes were up (11.72%), with the largest increase coming from Coal (39.55%) while the largest decrease came from Farm Products (-4.77%).

In the West, BN’s total volumes were up (8.91%), with the largest increase coming from Coal (23.38%) while the largest decrease came from Nonmetallic Minerals (-7.21%). UP’s total rail volumes were up (12.77%), with the largest increase coming from Coal  (35.12%), while the largest decrease came from Other (-18.16%).

In Canada, CN’s total rail volumes were down (*10.13%) with the largest increase coming from Grain, up  (+72.41%), while the largest decrease came from Intermodal (-28.45%). CP’s total rail volumes were up (5.19%) with the largest increase coming from Coal (60.81%), while the largest decrease came from Motor Vehicles and Parts (-26.24%).

KCS’s total rail volumes were up (7.15%) with the largest increase coming from Coal (+42.97%), while the largest decrease came from Other (-16%).

Source Data: AAR – PFL Analytics

Rig Count

North American rig count was down by -22 rigs week-over-week. U.S. rig count was down -7 rigs week over week and down by -34 rigs year-over-year. The U.S. currently has 583 active rigs. Canada’s rig count was down -15 rigs week-over-week and down by -3 rigs year-over-year.  Canada currently has 138 active rigs. Overall, year over year we are down by -37 rigs collectively.

North American Rig Count Summary

A few things we are watching:

We are watching Petroleum Carloads

The four-week rolling average of petroleum carloads carried on the six largest North American railroads fell to 27,268 from 27,982, which was a decrease of 714 rail cars week-over-week.  Canadian volumes were lower. CPKC’s shipments were lower by -1.3% week over week, and CN’s volumes were lower by -15% week-over-week. U.S. shipments were mostly lower.   The BN had the largest percentage decrease and was down by -13.4%.  The NS was the sole gainer and was up by +15.9%

  We are watching the Keystone Pipeline

Keystone Pipeline, which ships Canadian crude to Midwest refineries, was shut down on Tuesday of last week due to a pipeline rupture in North Dakota. Trucks and workers started cleaning up the Keystone oil pipeline spill in rural North Dakota – the cause and completion time are unknown as of the writing of this report.

Keystone Spill Zone

Source: Trans Canada – PFL Analytics

South Bow, which manages the pipeline, estimated the spill’s volume at 3,500 barrels, or 147,000 gallons. Keystone’s entire system remains shut down.  The estimated volume is equal to 16 tanker trucks of oil.

Keystone Spill

Source: South Bow – PFL Analytics

The U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) on Friday issued a Corrective Action Order (CAO) to South Bow which directs the operator to take specific actions to improve the safety of the Keystone Pipeline after a crude oil release was discovered on April 8, 2025, in Ransom County, North Dakota.

The affected pipeline segment cannot be restarted until PHMSA gives the operator permission.

The $5.2 billion Keystone Pipeline was built in 2010. TC Energy built the pipeline which is operated by South Bow as of last year. The Keystone pipeline is a 2,700-mile (4,350-kilometer) pipeline that originates in Alberta, Canada, and carries heavy crude oil south across the Dakotas and Nebraska before splitting to carry oil to refineries in Illinois and south to Oklahoma and Texas.  The pipeline’s capacity is some 600,000 barrels per day of crude.  We are watching this one closely – depending on the length of shut down could have a positive impact on crude by rail. As it stands right now, affected refineries have quite a bit of storage onsite and so does Alberta.  Alberta crude inventories at the end of February were 55.8 million barrels, the lowest level since September of 2024 and down 14.6 million barrels year over year.

We are Watching Coal

President Donald Trump, on Tuesday of last week, signed four executive orders designed to boost the U.S. coal industry, outlining steps to protect coal-fired power plants and expedite leases for coal mining on U.S. land.

The executive order instructed the National Energy Dominance Council to designate coal as a “mineral” under another measure that sought to “boost American mineral production, streamline permitting, and enhance national security,” according to the White House.

His order included other measures, including one instructing Doug Burgum Interior Secretary to “acknowledge the Jewell Moratorium” that halted coal leasing on federal land and one ordering agencies to “identify coal resources on federal lands,” get rid of barriers to mining and make coal leasing on federal lands a priority.

We are watching Renewables

A new bill introduced on Thursday of last week by Senators Roger Marshall (KS) and Amy Klobuchar (MN) may have big impacts across the biofuels supply chain. Called the Farmer First Fuel Incentives Act, it proposes two key changes:

1. Extend the 45Z tax credit from 2027 to 2034 — giving fuel producers seven more years to benefit from tax breaks on clean fuels like ethanol, biodiesel, renewable diesel, and SAF. The purpose is to incentive investment.
2. Limit the credit to U.S.-grown feedstocks — meaning imported materials like used cooking oil (UCO) from China or South America would not qualify for the tax credit.

Shuttered biodiesel facilities were lobbying to have the $1 biodiesel tax credit extended for another year the proposed extension of the 45Z tax credit may not make everybody happy in the short term but is praised by the ethanol industry.

If you’re involved in producing, moving, or investing in biofuels, this could directly affect your operations and planning.

The Biden Administration created the original 45Z credit to encourage clean fuel production under the Inflation Reduction Act. But, the rules were unclear—especially around what feedstocks qualified—so many producers started using cheaper, imported materials like used cooking oil. That didn’t sit well with U.S. farmers, who felt sidelined while foreign suppliers cashed in on American tax breaks. (see below)

U.S. used cooking oil imports by country

Source: South USDA – PFL Analytics

Now, lawmakers want to focus the credit on fuels made from American-grown materials, helping support U.S. agriculture and reduce reliance on imports.

In the 2023/24 marketing year, China provided 55% of U.S. used cooking oil imports, with Canada and Malaysia next. These imports made up 13% of the feedstocks used in biomass-based diesel, up from 7% the year before.

What It Could Mean for Your Business

For logistics: More U.S.-grown feedstocks means higher volumes moving from farms to fuel producers, driving demand for tank cars, transloading, and short-line rail, especially in the Midwest.

For biofuels or renewable trading: Limiting feedstocks to domestic sources could tighten the market for low-CI fuels, impacting RINs, LCFS, and 45Z credit values. Keep an eye on this if you rely on imports.

For tax credits or investment incentives: Extending 45Z to 2034 gives investors more time to plan, potentially leading to new biorefineries and infrastructure in rural areas.

This bill hasn’t passed yet, but it’s gaining traction—and it lines up with growing support for “U.S. fuel, U.S. jobs, U.S. tax credits.” Whether you’re a shipper, a fuel producer, or part of the renewable energy ecosystem, We are watching this one closely, so stay tuned to PFL for further updates.

We are Watching Trump – Trump signed an Executive Order to Rein in State Climate Laws

In case you missed it, on Tuesday of last week (April 8^th), President Trump signed a new Executive Order that could shake up how state climate laws are enforced across the country. The order directs the Department of Justice (DOJ) to push back on state and local environmental rules that go further than federal standards — especially those that, in the administration’s words, “unfairly burden” fossil fuel development.  California may be on the radar.

At its core, the move is about streamlining regulations and giving more power back to federal policy. For companies navigating the complex world of energy logistics, this could reduce uncertainty and ease some of the regulatory headaches that slow things down.

President Trump put it simply:

“We’re protecting America’s energy future from unlawful state interference.”

However, not everyone sees it that way. New York Governor Kathy Hochul, speaking the next day on April 9, called the order “unconstitutional” and made it clear that states like hers won’t be backing down without a fight.

Key Takeaways

Here’s what to know:

• By June 7, 2025: The DOJ is required to release an enforcement update (that’s 60 days after the order).
• Legal challenges are coming — especially in states with stricter emissions targets like California, New York, and Vermont.
• Major energy trade groups are backing the move, citing the need for consistent rules across state lines.

We know state-by-state regulations can affect everything from railcar demand to cross-border scheduling and fleet planning. If this order holds, it could help reduce permitting delays and make things more predictable. But, we also know court challenges are coming  and that could mean a bumpy ride in the short term.

The timing of the signing of this order is no coincidence. The order was signed the same day as a nationwide youth-led climate protest — a signal of just how politically charged this issue is. Just one day earlier, on April 7, news broke that the administration is looking at cuts to NOAA’s climate research budget.

Together, these moves point to a broader shift in federal priorities: less focus on environmental oversight, more focus on energy development and infrastructure.

From the PFL Team:

Whether you operate in California, the Northeast, or run cross–border into Canada, this policy change will affect how you plan, permit, and operate — especially if you’re managing emissions compliance or navigating state-specific rules. At the end of the day bullish for rail and seemingly good for the consumer in lower prices.  Stay tuned to PFL, we are watching this one.

We are watching the Federal Government – Enforcing Crime

Well, folks, in the good old days (which is seemingly not that long ago) it used to be the case that if you commit a crime, you do the time!  It’s back!  The Association of American Railroads on Thursday of last week endorsed the proposed Combating Organized Retail Crime Act of 2025, which would tackle evolving trends in organized retail theft.

The bill that was introduced by U.S. Senate Judiciary Committee Chairman Chuck Grassley (R-Iowa) and Sen. Catherine Cortez Masto (D-Nev.), the legislation would establish a coordinated multi-agency response and create new tools to tackle evolving trends in organized retail theft. The bill calls for a coordinated federal response to the mounting wave of sophisticated attacks against the nation’s supply chain and retailers, AAR officials said in a press release.

The legislation would create an Organized Retail and Supply Chain Coordination Center to bring together federal law enforcement agencies with state and local partners as well as railroad police to counter and dismantle domestic and transnational organized theft operations, according to AAR.

“Organized criminal operations continue to evolve and escalate their targeted attacks against our nation’s supply chain and retailers,” said Association of American Railroads President and CEO Ian Jefferies. “This alarming trend affects every industry — including the nation’s largest railroads, which experienced a 40% spike in cargo theft last year.”

For railroads, both the frequency and tactics of cargo theft attempts have evolved rapidly and escalated. Such thefts cost the rail industry more than $100 billion last year, according to AAR. Not to mention, our retailers that suffer on the back of it ultimately costing the consumer with higher prices and poorer services.  We are watching this one, please click here for a summary of the bill.

We are Watching Key Economic Indicators

Producer Price Index (“PPI”) | Consumer Price Index (“CPI”)

In March 2025, the U.S. PPI decreased by 0.4% month over month, marking the first decline in nearly 18 months. This follows a flat reading in February. On an annual basis, the PPI rose 2.7%, down from 3.2% in February, indicating continued easing in wholesale inflation.

The CPI decreased by 0.1% month over month, the first monthly decline in several months, following a 0.2% increase in February. This brought the annual inflation rate to 2.4%, down from 2.8% in February. Core CPI, which excludes food and energy, rose by 0.1% over the month, leading to an annual core inflation rate of 2.8%, the lowest since March 2021.

Lease Bids

• 10, 2500CF Open Top Hoppers needed off of UP or BN in Texas for 5 years. Cars are needed for use in aggregate service. Need Rapid Discharge Doors
• 25, 3230 PD Hoppers needed off of NS or CSX in Ohio for 5 years. Cars are needed for use in Flyash service. 
• 100, 5200 Covered Hoppers needed off of UP or BN in Northwest for 6 month. Cars are needed for use in Pet Coke service. Roud Hatch, Bottom Outlet Doors
• 100, 4750 Covered Hoppers needed off of UP or BN in Texas for 1-5 Years. Cars are needed for use in Petcoke service. 
• 50, 23.5-25.5 DOT111 Tanks needed off of Any Class 1 in USA for 5 years. Cars are needed for use in Asphalt service. 
• 20, 25.5k CPC 1232 Tanks needed off of UP, BN, CSX, NS in OK, TX, Northeast for 3 Year. Cars are needed for use in Asphalt service. 
• 10, 30K 117R or 117J Tanks needed off of Any Class 1 in USA for 1 year. Cars are needed for use in Glycerin  service. 
• 15-20, 29K 117R Tanks needed off of NS or CSX in Ohio for 6-12 Months. Cars are needed for use in Ply Oil service. 
• 30-50, 23.5K Any Type Tanks needed off of any class 1 in any location for 1-5Years. Cars are needed for use in Glycols service. 
• 10, Any Size Stainless Steel DOT111 Tanks needed off of UP or BN  in TX for 1-5 Years. Cars are needed for use in Refined Products service. 
• 100, 30K 117J Tanks needed off of UP or BN in Midwest for 5 Years. Cars are needed for use in Diesel service. Needed in Jan
• 10, 30K 117R Tanks needed off of CSX or NS in Southeast for 6 Months. Cars are needed for use in Crude service. Needed in Jan
• 20, 28K 117J Tanks needed off of CSX or NS in Midwest   for 12 Months. Cars are needed for use in Crude service. Needed in Jan
• 50, 30K 117R/117J Tanks needed off of CSX in Northeast for 5 Year. Cars are needed for use in Refined Fuels service. 
• 12, 28.3K Any Type Tanks needed off of UP or BN in Houston for 2Year. Cars are needed for use in Lube Oil service. 
• 20, 30K 117J Tanks needed off of UP or BN in Midwest   for 5 Years. Cars are needed for use in Ethanol service. 
• 100, 30K 117J Tanks needed off of BN   in Montana for 2 years. Cars are needed for use in Crude service. 
• 10, 25.5K Any Type Tanks needed off of CSX in Florida for 2 Years. Cars are needed for use in UCO service. 
• 10, 25.5K Any Type Tanks needed off of Any Class 1 in Any Location for 3-12 months. Cars are needed for use in Asphalt service. 
• 20,  GP Tanks needed off of various class 1s in various locations for 1-5 years. 

Sales Bids

• 28, 3400CF  Covered Hoppers needed off of UP BN in Texas. Cars are needed for use in Cement service. Cement Gates needed. 
• 20, 17K DOT111 Tanks needed off of various class 1s in various locations. Cars are needed for use in corn syrup service. 

Lease Offers

• 60, 4750,  Covered Hoppers located off of UP or BN in Eads, CO. Cars are clean UP to 5 Years, 3 Hopper, Gravity Gate, Trough Hatches
• 50, 33K, 400W Pressure Tanks located off of All Class 1s in Chicago. Cars were last used in Propylene. 1 Year Term
• 50, 29K , DOT 111 Tanks located off of CN   in Hamilton, ON. Cars were last used in Biodiesel. 1 year +
• 39, 30K, 117R Tanks located off of CN, NS, CSX in Detroit. Cars were last used in Diesel. 5 Years; Mid 2029 Return
• 20-25, 30K, 117J Tanks located off of BNSF in West Texas. Cars were last used in Ethanol. 1 year minimum
• 24, 25.5K-30K, DOT 111 Tanks located off of UP or BN in Texas. Cars were last used in Base Oils. 1-2 Year

Sales Offers

• 21, 50′, Plate C Boxcars located off of various class 1s in NM. End of Life
• 3, 50′, Plate C Boxcars located off of various class 1s in multiple locations. End of Life
• 27, 50′, Plate C Boxcars located off of various class 1s in PQ. End of Life
• 100-300, 3250,  Covered Hoppers located off of various class 1s in multiple locations. Sand Cars
• 5, 2740, Mill Gondolas located off of various class 1s in NC. End of Life
• 1, 2260, Mill Gondolas located off of various class 1s in AL. End of Life
• 30, 2740, Mill Gondolas located off of various class 1s in multiple locations. End of Life
• 21, 2740, Mill Gondolas located off of various class 1s in WA. End of Life
• 15, 4750, Covered Hoppers located off of various class 1s in multiple locations. End of Life
• 5, 4750, Covered Hoppers located off of various class 1s in multiple locations. End of Life
• 50-100, 31.8K, CPC 1232 Tanks located off of UP or BN in TX. Requal Due in 2025

Call PFL today to discuss your needs and our availability and market reach. Whether you are looking to lease cars, lease out cars, buy cars, or sell cars call PFL today at 239-390-2885

Live Railcar Markets

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The prospect of a significant reduction in global oil supply from stricter enforcement of sanctions on Iranian crude added upward momentum to prices, which have been volatile throughout the week. Andrew Lipow, president of Lipow Oil Associates, noted that such enforcement could tighten global supply, though he added, “I suspect China will continue to buy oil from Iran,” hinting at ongoing geopolitical complexities.

“The U.S. being a geopolitical risk is new for the market,” said John Kilduff of Again Capital, comparing the current climate to the geopolitical reordering that followed Russia’s invasion of Ukraine.

Compounding the market’s anxiety, China announced Friday that it would raise tariffs on U.S. goods to 125%, up from the previously announced 84%, effective Saturday. This came in direct response to Trump increasing tariffs on Chinese imports to 145% just a day earlier. Though the administration paused tariffs on many other U.S. trading partners for 90 days, the continued escalation between the world’s two largest economies is expected to weigh heavily on global trade flows and economic growth, thereby dragging down oil demand.

Ole Hansen of Saxo Bank said the damage to market confidence had already been done, noting that “prices [are] struggling to regain stability” despite the temporary reprieve in some tariffs. The U.S. Energy Information Administration reinforced those concerns Thursday, cutting both U.S. and global oil demand forecasts for this year and next, while lowering global economic growth expectations.

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However, any relief was short-lived as Trump simultaneously raised tariffs on Chinese imports to 145%. In response, China imposed an additional 84% levy on U.S. goods. Analysts warned that higher tariffs could further reduce U.S. crude exports to China, which already fell to 112,000 barrels per day in March—down from 190,000 bpd last year, based on vessel tracking data from Kpler. Ritterbusch and Associates noted that reduced Chinese buying would likely cause crude to back up in U.S. storage, putting additional pressure on prices.

Concerns about a prolonged trade war and its impact on global economic growth also weighed heavily on investor sentiment. Henry Hoffman of the Catalyst Energy Infrastructure Fund warned that continued disputes would cause “significant economic damage” globally. Those fears were echoed in recent data: U.S. crude stockpiles rose by 2.6 million barrels last week, nearly double analyst expectations. Macquarie analysts forecast another inventory build this week.

Meanwhile, the U.S. Energy Information Administration lowered its forecasts for both global economic growth and oil demand, citing the drag from trade tensions. The agency warned that ongoing tariff pressures could continue to weigh on prices, especially amid recession concerns. As Ritterbusch and Associates put it, the market remains focused on “tariff-driven expectations of reduced demand” and the looming threat of a U.S. economic downturn, which together are likely to cap any short-term gains in oil prices.

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Analysts viewed the move as a shift in tone, giving room for deals with countries open to negotiations while isolating China. China responded with its own escalations, announcing an 84% tariff on U.S. goods starting Thursday. Bob Yawger of Mizuho noted that the U.S. appears to be strengthening ties with other trade partners that China had hoped to align with.

Despite the gains, ongoing fears of a global recession continued to loom over the market. UBS analyst Giovanni Staunovo said oil demand hasn’t yet taken a hit, but growing concerns require lower prices to adjust supply before the market becomes oversaturated. Canada and the European Union also imposed retaliatory tariffs on Wednesday, further intensifying the trade conflict.

Meanwhile, OPEC+’s recent decision to boost output in May by 411,000 barrels per day weighed on gains, with analysts warning it could tip the market into surplus. U.S. crude inventories added to bearish sentiment, rising by 2.6 million barrels last week to 442.3 million—well above analysts’ forecasts. Additional pressure came from a force majeure declared on the Keystone pipeline following a leak in North Dakota, raising concerns over near-term supply disruptions.

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The sell-off intensified after a White House official confirmed that a 104% tariff on Chinese goods would take effect Wednesday morning, following Beijing’s refusal to lift its retaliatory 34% tariff. China responded defiantly, with its Commerce Ministry declaring it would “fight to the end,” stoking fears of a full-scale global economic contraction. Brent fell more than $2 during Tuesday’s session before settling.

Analysts warned of waning energy demand as trade hostilities mount. StoneX strategist Alex Hodes noted that recession concerns are now a central factor weighing on oil prices. Goldman Sachs forecast Brent and WTI prices at $62 and $58 per barrel, respectively, by December 2025, and projected further declines a year later. Meanwhile, J.P. Morgan’s Natasha Kaneva said the U.S. appears committed to pushing oil prices toward $50, even if that requires enduring shale-like disruption reminiscent of the 2014 OPEC price war.

Separately, geopolitical tensions resurfaced as Trump announced upcoming direct talks with Iran on its nuclear program—though Iran later clarified the discussions would be indirect. U.S. Energy Secretary Chris Wright said further sanctions were likely if Iran failed to cooperate. On the supply side, early estimates indicated a 1.6 million barrel rise in U.S. crude and distillate inventories last week, reinforcing concerns about weakening demand ahead of official data due later in the week.

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The session was marked by sharp intraday volatility, with crude down more than $3 overnight before briefly rebounding on a report that President Trump might pause tariffs for 90 days—a claim quickly denied by the White House, sending prices back into the red. Market jitters intensified after China announced 34% retaliatory tariffs on U.S. goods, prompting Trump to threaten an additional 50% levy if Beijing does not back down. He also declared that all trade talks with China were off the table. In parallel, the European Commission proposed 25% counter-tariffs on a range of U.S. imports in response to Trump’s earlier steel and aluminum duties.

Major banks responded to the growing uncertainty by cutting oil forecasts and raising recession probabilities. Goldman Sachs now sees a 45% chance of a U.S. recession in the next year, while JPMorgan estimates a 60% probability of a global downturn. Citi and Morgan Stanley also lowered their Brent crude outlooks, reflecting heightened concern over the fallout from a full-scale trade war.

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