Released May 19, 2025 | SUGAR LAND
en
Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Even with a modest recovery, crude oil prices remain at levels not seen since the pandemic amid global warnings that U.S. trade policies are undermining growth.
West Texas Intermediate (WTI), the U.S. benchmark for the price of oil, traded at around $61 per barrel in early Friday trading. Prices had recovered somewhat during the week as China and the United States walk back from the brink of a trade war, but they still remain under pressure.
"Markets, investors and companies need certainty," Tamas Varga, an analyst at London oil broker PVM, wrote in a Friday newsletter. "Without it, investment is deemed too risky with all its economic side effects."
U.S. President Donald Trump declared April 2 as "Liberation Day" when reciprocal tariffs were unveiled on nearly every U.S. trading partner. The tit-for-tat exchange with China saw goods hit with taxes that would double the normal value, though both sides have since backed down.
The U.S. Energy Information Administration (EIA), the statistical arm of the U.S. Energy Department, said Thursday that tariffs are already creating headwinds for global trade. With most goods delivered on ships, slower vessel traffic is pointing to a slowdown in demand, which could eventually show up as sluggish employment.
"All these factors weigh on oil consumption growth," the EIA stated.
EIA expects oil consumption will increase by less than 1 million barrels per day (BBL/d) both this year and next, marking three straight years of sluggish growth. Over the 20-year period up to the COVID-19 pandemic, consumption increased by 1.3 million BBL/d on average each year.
Adriana Kugler, a governor at the U.S. Federal Reserve, said recent data show the economy remains resilient, though that may be skewed by a surge in imports ahead of tariff announcements.
"Looking ahead, I am monitoring the effects of changing trade policies, as I see them as likely having a significant effect on the U.S. and global economies in the near future," she said May 12.
In its monthly market report for May, EIA said it expected U.S. gross domestic product to increase by 1.5% this year, a 0.5% reduction from the prior month forecast. Oil production, meanwhile, outpaces global demand through at least 2026, pointing to a possible market glut.
OPEC+, the Organization of the Petroleum Exporting Countries and non-member state allies such as Russia, opted to loosen voluntary production restraints, creating further pressure on the commodities market.
The International Energy Agency (IEA), meanwhile, said it expected global demand to drop from a three-month average to March of 990,00 BBL/d to 650,000 BBL/d for the rest of the year. The first quarter is likely to be the strongest quarter of the year by far.
"Signs of a slowdown in global oil demand growth may already be emerging," the IEA stated.
Though industry advocacy groups are praising Trump for working to dismantle some burdensome regulations, representatives from the energy sector are concerned that his trade policies are leaving oil prices well below the point at which drillers can make a profit.
A March survey from the Federal Reserve Bank of Dallas found drillers need oil priced at $64 per barrel to make a profit. The EIA expects WTI to average $61.81 per barrel this year and $55.24 per barrel next year, a lower-for-longer climate that could eventually curb production and erase the global glut.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
West Texas Intermediate (WTI), the U.S. benchmark for the price of oil, traded at around $61 per barrel in early Friday trading. Prices had recovered somewhat during the week as China and the United States walk back from the brink of a trade war, but they still remain under pressure.
"Markets, investors and companies need certainty," Tamas Varga, an analyst at London oil broker PVM, wrote in a Friday newsletter. "Without it, investment is deemed too risky with all its economic side effects."
U.S. President Donald Trump declared April 2 as "Liberation Day" when reciprocal tariffs were unveiled on nearly every U.S. trading partner. The tit-for-tat exchange with China saw goods hit with taxes that would double the normal value, though both sides have since backed down.
The U.S. Energy Information Administration (EIA), the statistical arm of the U.S. Energy Department, said Thursday that tariffs are already creating headwinds for global trade. With most goods delivered on ships, slower vessel traffic is pointing to a slowdown in demand, which could eventually show up as sluggish employment.
"All these factors weigh on oil consumption growth," the EIA stated.
EIA expects oil consumption will increase by less than 1 million barrels per day (BBL/d) both this year and next, marking three straight years of sluggish growth. Over the 20-year period up to the COVID-19 pandemic, consumption increased by 1.3 million BBL/d on average each year.
Adriana Kugler, a governor at the U.S. Federal Reserve, said recent data show the economy remains resilient, though that may be skewed by a surge in imports ahead of tariff announcements.
"Looking ahead, I am monitoring the effects of changing trade policies, as I see them as likely having a significant effect on the U.S. and global economies in the near future," she said May 12.
In its monthly market report for May, EIA said it expected U.S. gross domestic product to increase by 1.5% this year, a 0.5% reduction from the prior month forecast. Oil production, meanwhile, outpaces global demand through at least 2026, pointing to a possible market glut.
OPEC+, the Organization of the Petroleum Exporting Countries and non-member state allies such as Russia, opted to loosen voluntary production restraints, creating further pressure on the commodities market.
The International Energy Agency (IEA), meanwhile, said it expected global demand to drop from a three-month average to March of 990,00 BBL/d to 650,000 BBL/d for the rest of the year. The first quarter is likely to be the strongest quarter of the year by far.
"Signs of a slowdown in global oil demand growth may already be emerging," the IEA stated.
Though industry advocacy groups are praising Trump for working to dismantle some burdensome regulations, representatives from the energy sector are concerned that his trade policies are leaving oil prices well below the point at which drillers can make a profit.
A March survey from the Federal Reserve Bank of Dallas found drillers need oil priced at $64 per barrel to make a profit. The EIA expects WTI to average $61.81 per barrel this year and $55.24 per barrel next year, a lower-for-longer climate that could eventually curb production and erase the global glut.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
