Oil prices recovered on Friday after facing their second consecutive weekly decline due to the intensifying trade tension between the top two economies. West Texas Intermediate futures rose by 2.4% to close at $61.50 per barrel as China increased tariffs on all US goods to 125% but indicated it would not react to further hikes from Washington. This led to a rebound in equities and a decrease in longer-term Treasury selloffs, supporting oil prices later in the day.

The ongoing trade conflict between the US and China has led to significant sell-offs in various markets over concerns of a global economic slowdown. The US Energy Information Administration has revised down its crude demand forecasts for this year by almost 500,000 barrels per day, while indicators in the oil market point towards an oversupply in the future.

Oil prices have fallen by approximately 14% in April, partly due to an OPEC+ decision to ramp up production earlier than expected. The US has imposed high tariffs, including a 145% duty on imports from China, which has reciprocated with its tariffs, straining relations between the two countries.

US Energy Secretary Chris Wright stated in a Bloomberg Television interview that the recent market decline is exaggerated and believes the US will have a stronger economy under President Donald Trump, anticipating increased production of US crude and natural gas under his administration.

The decline in oil prices has affected related products, with US gasoline futures decreasing by almost 3% this week. The outlook for oil prices remains uncertain due to economic volatility, with analysts expecting prices to remain under pressure in the foreseeable future, projecting a gradual rollback of the OPEC+ production cuts.