Brent plunges amid US-China trade concerns
The front-month ICE Brent contract has dropped by $1.89/bbl on the day, to trade at $61.95/bbl at 09.00 GMT.
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Upward pressure:
Brent crude has felt some upward pressure after the OPEC+ oil producers group left its global oil demand growth forecasts largely unchanged at 1.3 million b/d and 1.4 million b/d for this year and 2026, respectively.
Global oil consumption is expected to average 105.14 million b/d this year – the same as OPEC's estimate a month ago.
About 46 million b/d will be consumed by OECD countries, while non-OECD countries are expected to consume around 59.2 million b/d this year. Most of this growth is expected to come from China, India and other Asian countries.
Downward pressure:
Brent crude’s price has slipped as renewed trade tensions between the US and China – the world’s two largest oil consumers – have continued to add uncertainty in the market.
“The oil industry continues to navigate geopolitical issues,” ANZ Bank’s senior commodity strategist Daniel Hynes said.
Last week, Beijing broadened its export controls on rare earths, prompting a swift response from US President Donald Trump, who threatened to impose 100% tariffs and implement software export curbs, starting November 1.
Both nations have now started charging additional port fees on shipping firms that move everything from toys to crude oil. Earlier today, Beijing announced sanctions against five US-linked subsidiaries of South Korean shipbuilder Hanwha Ocean, Reuters reported.
The escalating trade tensions have weighed heavily on market sentiment, according to analysts.
“The trade war is once again grinding its gears, and Beijing is showing no signs of slamming the brakes,” remarked SPI Assets Management managing partner Stephen Innes.
By Aparupa Mazumder
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