Oil Prices Face Weekly Decline Amid US-China Trade Tensions

Market Overview: Commodities and Currencies Under Pressure

Global markets remained cautious on April 25, 2025, as oil prices headed for a weekly decline amid ongoing US-China trade tensions. Meanwhile, gold retreated from recent highs, and the British pound struggled against the dollar as investors assessed economic risks.

Oil Markets Under Pressure From OPEC+ and Trade Uncertainty

Oil prices saw modest gains on Friday but remained on track for a weekly loss due to concerns over increased supply and persistent trade tensions.

• Brent crude futures rose 0.4% to $65.91perbarrel\ast \ast ,while\ast \ast WestTexasIntermediate(WTI)crude\ast \ast edgedup0.1$62.87 per barrel.
• Despite the daily uptick, both benchmarks were down nearly 2% for the week, reflecting market anxiety over supply and demand imbalances.

Reports indicate that OPEC+ members are considering accelerating production increases in June, following an unexpected output boost of 411,000 barrels per day in May. Analysts warn that additional supply could further depress prices, especially with global demand remaining uncertain.

Anh Pham, senior analyst at LSEG, noted:

"Oil prices are slightly up today due to easing tariff concerns and potential Fed policy shifts, but weekly losses persist due to oversupply fears and trade tensions. A stronger U.S. dollar is also weighing on crude."

China Considers Tariff Exemptions, Easing Trade Tensions

In a potential shift, China is reportedly considering exemptions for certain U.S. imports from its 125% tariffs. Beijing has asked businesses to identify goods that could qualify for relief, signaling concerns over the economic impact of prolonged trade disputes.

This development follows statements from President Donald Trump, who reaffirmed ongoing discussions with China despite Beijing’s denial of recent official talks.

Gold Retreats as Safe-Haven Demand Weakens

Gold prices fell on Friday as signs of easing trade tensions reduced demand for the traditional safe-haven asset.

• Gold futures (GC=F) dropped 1% to $3,314.20 per ounce.
• The spot price declined 0.8% to $3,309.68.

Despite the pullback, gold remains significantly higher in 2025, having surged nearly $700sinceJanuary\ast \ast andreachingarecordhighof\ast \ast$3,500.05 earlier in the week.

Yeap Jun Rong, IG market strategist, commented:

"A partial tariff rollback could reduce safe-haven demand for gold, but macroeconomic uncertainties continue to support its long-term appeal."

Pound Weakens Amid Economic Concerns

The British pound (GBP/USD) slipped 0.2% to $1.3304, pressured by:

• Renewed trade tensions impacting global growth expectations.
• Bank of England (BoE) warnings about rising protectionism.

Andrew Bailey, BoE Governor, cautioned:

"We must take seriously the risks to growth, especially with an interest rate decision approaching."

Meanwhile, the U.S. Dollar Index (DXY) gained 0.2% to 99.59, supported by a slight shift in Fed policy expectations.

FTSE 100 Remains Flat

The FTSE 100 (^FTSE) showed little movement, trading at 8,407.88 points, as investors awaited further economic signals.

Key Takeaways for Investors

1. Oil prices remain volatile due to OPEC+ supply dynamics and trade uncertainties.

2. Gold’s rally pauses but retains long-term bullish momentum.

3. Sterling faces pressure from global trade risks and domestic economic concerns.

4. China’s tariff considerations may signal a potential de-escalation in US-China tensions.

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