Oil prices continue on a volatile path influenced by sudden changes in US trade policy, with futures slipping back into losses following a brief rally prompted by President Donald Trump's decision to pause certain tariffs. Brent fell below $64 per barrel after a turbulent session that included hitting a four-year low before recovering with the largest one-day gain since October. Despite Trump's announcement of a 90-day halt on additional tariffs for many countries, duties on China were increased to 125%. Chinese leaders are set to convene to discuss further stimulus plans on Thursday.

Due to lingering uncertainties, the potential for a significant crude oil rebound seems unlikely at this stage, as the market must navigate the risks of weakened demand and increased production from OPEC. Oil prices have significantly decreased since the beginning of the month due to US tariff actions that have raised concerns about a global recession that could dampen energy consumption. Moreover, the OPEC+ alliance's decision to ease output restrictions faster than anticipated has raised fears of a larger global oversupply.

China, being a major oil importer, could face decreased fuel and petrochemical consumption due to the higher US tariffs. Even before Trump's tariff announcements, gasoline and diesel usage had been declining, partly due to an extended property crisis and the growing popularity of electric vehicles and renewable energy sources.

Reflecting the nation's economic challenges, recent data showed continued consumer and factory deflation, emphasizing the need for support measures in sectors like housing and consumer spending. Certain segments of the oil futures market exhibit a bearish contango pattern, where near-term contracts trade at a discount to longer-dated ones. Oil prices are expected to resume their downward trajectory as the positive sentiment from the tariff pause diminishes, with ongoing demand pressures in China creating further obstacles to oil price recovery.