Oil prices drop in market

Oil prices slipped on Monday, May 19, 2025, after Moody’s downgraded the U.S. sovereign credit rating and official data showed a slowdown in the pace of China’s industrial output and retail sales.

Front-month Brent crude futures edged down 51 cents, or 0.8%, to $64.90 a barrel by 0630 GMT, while U.S. West Texas Intermediate crude dropped 45 cents, or 0.7%, to $62.04 a barrel.

The front-month June WTI contract expires on Tuesday and the more-active July contract fell 48 cents, or 0.8%, to $61.49 a barrel.

Both contracts rose more than 1% last week after the U.S. and China, the world’s two biggest economies and oil consumers, agreed to a 90-day pause on their trade war with sharply lower import tariffs.

Moody’s downgrade raises questions about the outlook for the U.S. economy, and China’s data points to a bumpy road ahead for any economic recovery, said Priyanka Sachdeva, a senior market analyst at Phillip Nova.

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The Moody’s downgrade may not impact oil demand directly, but it does create more sober market sentiment, she said.

Moody’s downgraded the U.S. sovereign credit rating on Friday over the country’s growing $36 trillion debt pile, a move that could complicate President Donald Trump’s efforts to cut taxes.

Meanwhile in China, the world’s largest crude oil importer, official data showed growth in industrial output slowed in April, though still fared better than economists had expected, Reuters reported.

While Beijing and Washington reached an agreement last week to roll back most tariffs imposed on each other’s goods, the short-term truce and Trump’s unpredictable approach continue to cast a shadow over China’s export-driven economy, which still faces 30% tariffs on top of existing duties.

The outcome of Iran-U.S. nuclear talks remains uncertain, limiting losses in oil prices.

The Star