West Texas Intermediate (WTI) crude oil is trading at approximately $70.35 during the early Asian session on Friday, edging lower amid growing concerns of weakening demand. The price dip follows China’s announcement of retaliatory tariffs on US crude imports, as well as a second consecutive weekly rise in US oil inventories.
The ongoing US-China trade conflict is raising concerns that it could further dampen oil demand, especially from China, the world’s largest oil importer. On Tuesday, China’s finance ministry imposed tariffs on a variety of US products, including crude oil, in response to a 10% tariff on Chinese goods announced by US President Donald Trump.
Meanwhile, the latest US Energy Information Administration (EIA) report showed a larger-than-expected increase in US crude stockpiles, further exacerbating worries about global demand. For the week ending January 31, US crude inventories rose by 8.664 million barrels, surpassing market expectations of a 3.2 million barrel increase and following a 3.463 million barrel gain in the prior week.
Despite these bearish factors, rising geopolitical tensions in the Middle East may provide some support for WTI prices. President Trump’s proposal to seize control of Gaza and plans to tighten sanctions on Iran, including efforts to reduce Tehran’s oil exports to zero, could escalate regional tensions and bolster oil prices.
