Oil rode higher on Chinese demand and partial tariff relief, but further trade disruptions loomed

Oil prices extended gains for a second consecutive session on Monday, supported by a rebound in Chinese crude imports and temporary tariff exemptions by the US. However, concerns over the trade war’s impact on long-term global demand continued to cap upside momentum.

Brent crude rose 12 cents to settle at $64.88 a barrel.

US West Texas Intermediate (WTI) inched up 3 cents to $61.53 a barrel.

The modest gains followed a US decision to exempt Chinese smartphones, computers, and select electronics from reciprocal tariffs (125%) imposed on 9 April. Similar exemptions were also extended to other nations under the 10% baseline tariff that took effect on 5 April.

Fundamental support also came from China’s March crude imports, which rose nearly 5% year-on-year as buyers stepped up purchases of Russian and Iranian crude. Urgency to build Iranian inventories grew amid the possibility of tighter US restrictions ahead.

However, lingering trade tensions continued to cloud demand expectations. Highlighting this pressure, the US remained set to announce new tariffs on semiconductor imports in the following week, highlighting the uncertain path ahead for global economies and fuel demand.

Written: Derek Yong