Oil Prices Drop on Weak Chinese Inflation and Ongoing Tariff Concerns

Oil prices fell in Asian trading on Monday as weak inflation data from China raised concerns over slowing demand, while uncertainty about U.S. trade tariffs also weighed on the market.

Weak Chinese Inflation Data Pressures Oil

Brent oil futures for May delivery dropped 0.4% to $70.10 per barrel, and West Texas Intermediate (WTI) crude futures fell 0.4% to $66.48 per barrel by 22:48 ET (02:48 GMT). Although both contracts were above the lows from last week, they continued to reflect several weeks of steep losses.

China’s consumer and producer inflation data, released over the weekend, showed ongoing deflationary trends, indicating weak domestic demand in the world’s largest oil importer. This raised concerns about China’s future demand for crude oil. The data highlighted the need for more economic stimulus measures, which the Chinese government had promised but had yet to detail.

Tariff Concerns Add to Market Uncertainty

The market also remains unsettled by U.S. President Donald Trump’s trade policies. His recent hike of tariffs on Chinese imports to 20%, along with uncertainty surrounding further tariffs, has fueled fears of a global trade war that could harm oil demand. Last week, Trump imposed and then delayed 25% tariffs on Canadian and Mexican goods, adding to the unpredictability.

In a Fox News interview, Trump suggested the U.S. economy might face a recession and reiterated his tariff threats, while pushing for increased domestic energy production. He also called on Saudi Arabia and other OPEC+ members to boost oil production, which led to a slight increase in output last week.