Oil prices drifted lower on Monday as fresh doubts about economic momentum in both the United States and China overshadowed last week’s optimism over their tentative tariff-rollback deal. Brent futures slipped about 0.7% to hover near $65 a barrel, while West Texas Intermediate retreated toward $61.50, extending a cautious pullback that began after Friday’s downgrade of U.S. sovereign debt by Moody’s.
The loss of America’s triple-A rating—an action analysts say could erode long-term confidence in U.S. finances—came just as Beijing released April data showing a slowdown in industrial production and retail spending. The pairing of weaker numbers from the world’s two largest oil consumers rekindled concern that global demand may soften more sharply than markets had assumed only a week ago, when news of U.S.–China tariff relief had lifted crude by more than one percent.
Geopolitics added to the unease. Washington’s envoy to the Iran talks insisted on Sunday that any revived nuclear accord must bar Tehran from enriching uranium, drawing a swift rebuke from Iranian officials and casting fresh uncertainty over the negotiations. At the same time, traders kept one eye on an expected phone call between Presidents Donald Trump and Vladimir Putin, mindful that even a hint of progress toward ending Russia’s war in Ukraine could reshape supply expectations.
Despite Monday’s dip, crude remains buffered by several offsetting forces: a softer dollar that helps underpin commodity demand, OPEC+ plans to taper output curbs gradually rather than flood the market, and sporadic supply risks from Middle-East flashpoints. Yet with futures still more than ten percent below January levels and the macro picture darkening, analysts warn that oil is navigating “a decidedly bearish backdrop” in which any rally is likely to be tentative and tightly linked to incoming data on growth and diplomacy.