Oil Prices Slip Amid U.S.-China Trade Escalation

Crude oil softened by midday Wednesday as persistent U.S.-China trade tensions clouded the demand outlook.

At noon ET, December NYMEX West Texas Intermediate was down about $0.40 to $57.90/barrel and November WTI was likewise off roughly $0.40 to $58.40/barrel. London ICE December Brent eased about $0.40 to $62.00/barrel and January Brent traded near $61.70, leaving both benchmarks on track for a second straight daily loss.

Refined product contracts were mixed: December ULSD fell 1.4 cents to $2.1625/gal and November ULSD dropped 1.75 cents to $2.1805/gal, while December RBOB gained 0.5 cent to $1.783/gal and November RBOB rose 0.35 cent to $1.832/gal.

Market participants pointed to escalatory measures between Washington and Beijing - reciprocal port fees on container vessels and Beijing’s newly imposed restrictions on rare-earth exports - as key downside demand risks. Traders warn such steps, along with threatened tariffs, could dent global growth and refine product consumption.

The Energy Information Administration’s weekly petroleum report was postponed to Thursday due to a U.S. holiday. In the physical market, Group 3 sub-octane gasoline jumped 9 cents on strong bids, while Pacific Northwest sub-octane fell 4 cents after Tuesday’s selloff; most physical products largely mirrored futures moves.