Oil prices fell over $1, reaching around $58.00 on Tuesday due to renewed fears about the US-China trade war. Both countries have announced higher taxes on cargo vessels, which has affected trade expectations and raised worries about an oil surplus.

Crude Output and Trade Concerns

The West Texas Intermediate (WTI) Oil price is just above a five-month low of $57.90. Despite hopes for easing tensions between the US and China, both nations remain firm in their stances. President Trump is scheduled to meet Xi Jinping later this month. Additionally, crude output is expected to rise by 137,000 barrels per day in November. Although this increase is smaller than expected, it keeps the threat of an oil surplus high amid ongoing trade uncertainties. WTI Oil, or West Texas Intermediate, is a high-quality crude oil that is easy to refine. It is produced in the United States and serves as a market benchmark. Factors affecting WTI prices include supply and demand, political instability, OPEC’s decisions, and the US Dollar’s value. Weekly API and EIA reports influence WTI Oil prices by showing changes in inventories, which indicate shifts in supply and demand. OPEC also affects prices by adjusting production levels.

Trade Anxiety’s Effect on Oil Prices

On October 14, 2025, WTI crude is struggling around the $58 mark after a more than $1 drop. The new taxes on cargo vessels between the US and China have created fears of a major slowdown in global trade, casting doubt on the planned late-October meeting between the two leaders. This trade anxiety adds to a weak global economic outlook. The International Monetary Fund recently lowered its global growth forecasts for the fourth consecutive quarter, with trade tensions being a major concern. Recent purchasing managers’ index (PMI) data from Europe and Asia has also consistently fallen short of expectations. On the supply side, attention is on today’s API inventory report, especially following last week’s unexpected build of 2.1 million barrels in the EIA data. Another increase would confirm fears of a supply glut, especially since producers plan to boost output next month. This makes tomorrow’s EIA report vital. The current situation echoes the market behavior during the 2018-2019 trade war, with sharp and unpredictable price swings. Traders who bought put options to guard against losses profited from earlier downturns triggered by negative news. Given the current climate, having some downside protection through puts could be a smart move. With prices dropping, volatility is expected to rise in the coming weeks. Consider options strategies like straddles or strangles to navigate this anticipated increase in price movements. It’s also important to monitor any statements from OPEC+, as rumors of an emergency meeting could quickly support prices if they approach the $55 level. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now