Oil prices hold steady as strong U.S. job data signals robust demand but growing fears of a trade war—especially between the U.S. and China—keep gains in check. Market watchers' eye global tariff talks as a key driver for future oil price direction.
Oil prices remained stable this week as international markets absorbed two diverging indicators: a strong U.S. jobs market and heightened anxiety over tariffs. Although solid employment reports are indicative of steady energy demand, continued uncertainty regarding international tariffs—namely between the U.S. and China—is restraining oil gains.
The U.S. labor market is still robust, with lower claims than anticipated. Initial jobless claims decreased 10,000 last week to 222,000, the Labor Department said. That’s a good indicator of the economy—and when consumers are working and paying bills, it often means more energy is being consumed.
Brent crude rose by only 0.2%, finishing at $86.65 per barrel, while American West Texas Intermediate (WTI) held at $83.20. Unemployment continues to stay at a record-low 3.6%, providing analysts with even more confidence that oil demand will continue strong in the near future.
More economic activity means higher fuel use in transportation and manufacturing sectors. But that optimism is being soured by rising worries on the global trade front.
In spite of the good news on jobs, the threat of new tariffs—particularly between the U.S. and China—is looming over oil markets. Rumors of raising tariffs on Chinese-made electric vehicles and the other products have erupted fear of a trade war, which will lower overall economic activity and lower oil consumption.
China, the world’s second-largest consumer of oil, is a key factor in the performance of the crude market. Any weakness in its trade or manufacturing output can rattle investor sentiment over future oil demand.
While OPEC+ remains cutting oil to prop up prices, their actions are being countered by fears of worldwide demand. Traders and analysts now wait with bated breath for news on global trade talks. Any step—or breakdown—can turn prices either way in the blink of an eye.
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