08:54 AM EDT, 03/21/2025 (MT Newswires) -- Oil prices weakened early on Friday as the trade wars pushed by U.S. President Donald Trump threaten to slow growth while supply is on the rise.

In its first day as the active contract, West Texas Intermediate crude oil for May delivery was last seen down US$0.24 to US$67.83 per barrel, while May Brent crude was down US$0.33 to US$71.67.

The drop comes as the market focuses on slowing global growth as the United States upsets trade flows by imposing tariffs on its largest trading partners. The U.S. is promising to impose blanket 25% tariffs on imports from Canada and Mexico on April 2, adding to the 25% levies it has already placed on aluminum and steel imports, while taxing imports from China at a 20% rate.

The capricious U.S. trade policies are threatening to slow growth and oil demand even as supply is on the rise. The Organization for Economic Co-operation and Development (OECD) this week cut its outlook for 2025 global economic growth to 3.1% from 3.3% as it expects U.S. policies to hamper trade and further slow the economy of China, the No.1 importer.

"The Chinese economy is struggling. It grew 5% last year and the advance will be slower this year and in 2026: 4.8% and 4.4%. The symptoms are well-publicized. The property sector, which contributes anywhere between 20-30% to the GDP, has not recovered from the recent slumps, severely denting consumer and investor confidence. Consumers rather save than spend denting aggregate demand. Youth unemployment is high. Tariffs have already been introduced by the Trump administration on Chinese goods, which comes at a time when weak global demand causes significant headwinds for the export sector," PVM Oil Associates wrote.

Expectations for slowing growth comes as supply outside of OPEC+ is on the rise, while the cartel plans to begin returning 2.2-million barrels per day of production cuts to market in monthly tranches, beginning with 138,000 barrels per day of new supply in April.

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