On Wednesday (April 30), during the Asian trading session, oil prices were nearly flat. Due to uncertainty over U.S. trade policy and an unpredictable outlook for global economic growth, traders hold a negative view on the future of oil demand. Additionally, weak data from China’s manufacturing sector further exacerbated these concerns. The dual pressure of slowing demand and increasing supply led to a significant hit in the oil market in April, with prices set to record a sharp monthly drop. In early April, oil prices briefly hit a four-year low.
As of 10:01 PM Eastern Time (02:01 Beijing Time), Brent crude oil futures for June delivery fell 0.1% to $64.18 per barrel, while U.S. WTI crude oil futures were essentially unchanged at $60.30 per barrel. Brent crude prices are set to fall by about 14% in April, marking the largest monthly decline since November 2021, while WTI crude prices are down nearly 16%.
Industry data shows a significant increase in U.S. oil inventories, which may indicate rising supply and weakening demand, adding further pressure on oil prices. The upcoming focus will be the meeting of OPEC and its allies (OPEC+), with the market broadly expecting the organization to announce a production increase decision in June. Moreover, the Russia-Ukraine ceasefire talks also remain a focus, as any progress could imply an increase in oil supply. Russia announced a three-day ceasefire starting in early May, which could affect the oil market.
China's PMI Data Disappoints, Highlights Impact of Trade Tensions
As the world's largest importer of crude oil, China's purchasing managers index (PMI) data shows that most indicators in April shrank more than expected, reflecting the impact of the country's intense tariff conflict with the U.S. The data shows the manufacturing PMI contracted due to a significant drop in overseas orders, while non-manufacturing growth is also slowing. This data underscores the negative impact of U.S.-China trade friction on China's economy, intensifying concerns over a slowdown in growth in the world's second-largest economy.
China's demand slowdown is placing direct pressure on the oil market, as China is the world's largest oil importer. In recent weeks, the high uncertainty of U.S.-China trade negotiations has added to the downward pressure on crude prices, with the conflicting positions in the trade friction escalating. U.S. officials stated they are in dialogue with China, yet Beijing denies that such talks exist. The increase in U.S. oil inventories also exceeded market expectations.
According to the latest data from the American Petroleum Institute (API), U.S. oil inventories increased by 3.76 million barrels last week, far exceeding the market expectation of a 390,000-barrel increase. This data has sparked concerns about abundant U.S. oil supply, while fuel demand may continue to weaken amid escalating economic turmoil. API data typically foreshadows similar changes in upcoming government inventory reports.
