Oil resumed decline amid mounting doubts over US-China trade talks

Crude oil prices resumed their downward trajectory on Wednesday, 7 May 2025, as growing scepticism over the outcome of upcoming US-China trade talks weighed on market sentiment. International benchmarks fell by more than $1 per barrel, reflecting investor pessimism that the negotiations will yield any substantive progress.

Brent crude futures settled $1.03, or 1.66%, lower at $61.12 a barrel

WTI lost $1.02, or 1.73%, lower at $58.07 a barrel.

The latest round of discussions between the US and China is scheduled to take place in Switzerland, marking a potential step towards de-escalating the prolonged trade dispute that has disrupted global economic activity. However, expectations for a significant breakthrough remain muted, according to market participants, who continue to view the standoff as a persistent drag on oil demand growth.

Adding further pressure to prices, data released by the US Energy Information Administration (EIA) revealed an unexpected increase in domestic gasoline inventories last week. The surprise build has sparked concerns over tepid fuel demand heading into the summer driving season, traditionally a period of stronger consumption.

Meanwhile, the US Federal Reserve kept interest rates unchanged but cautioned that continued tariff pressures could drive inflation higher and exacerbate risks to the labour market.