London — Oil prices inched down on Tuesday after the International Energy Agency followed OPEC in slashing its oil demand forecast, though price falls were limited by U.S. President Donald Trump’s suggestion of some new tariff exemptions.
Brent crude futures were down 54 cents, or 0.8%, at $64.34 per barrel by 1222 GMT. U.S. West Texas Intermediate crude dipped 57 cents, or 0.9%, to $60.96 a barrel.
Vacillating U.S. trade policies have created uncertainty for global oil markets and prompted OPEC on Monday to lower its demand outlook.
The IEA also cut its forecasts on Tuesday for global oil demand growth to 730,000 barrels per day (bpd) this year from 1.03 million bpd – and to 690,000 bpd next year, citing escalating trade tensions.
Meanwhile, Swiss bank UBS cut its price forecast for Brent by $12 a barrel to $68 a barrel on Tuesday.
“Should the trade war further escalate, our downside risk scenario case — i.e., a deeper U.S. recession and a hard landing in China — could see Brent trading at $40-60/bbl over the coming months,” said UBS analyst Giovanni Staunovo.
BNP Paribas lowered its average price expectation for this year and next to $58 a barrel from $65. HSBC cut its Brent forecasts to $68.50 a barrel for this year and $65 for next.
In comments that helped to support prices, U.S. Energy Secretary Chris Wright said on Friday the United States could stop Iranian oil exports as part of Trump’s plan to pressure Tehran over its nuclear programme.
Data on Monday showed that China’s crude oil imports in March were up nearly 5% from a year earlier as arrivals of Iranian oil surged.
Risk assets such as equities and oil also got some support after Trump said he was considering a modification to the 25% tariffs imposed on foreign auto imports from Mexico and other places.
Additional reporting by Colleen Howe in Beijing, Emily Chow in Singapore; editing by Jason Neely, Kirsten Donovan – Reuters
