On Monday, oil prices pared gains from last week, on worries that the fall in demand for fuel may persist as US-China trade tensions could hold back the economic recovery that had just begun on easing COVID-19 related lockdowns.
After rising 23 percent last week, the global benchmark for oil prices, Brent crude futures, fell 3.4 percent on Monday to $25.54 a barrel.
Prices had only recovered last week, after three consecutive weeks of losses, as business restrictions in some cities around the world were expected to ease the global fuel glut and pressure on storage tanks.
Further, oil markets received support as major producers led by Saudi Arabia and Russia were set to begin cutting production on 1 May and top two American producers, Exxon Mobil Corp and Chevron Corp said they would cut output by 400,000 barrels per day this quarter.
However, comments from the US President Donald Trump threatening to consider raising tariffs on China as a retaliation for the spreading the coronavirus renewed fears that trade tensions could hurt an economic recovery, halting gains in oil prices.
Analysts told Reuters that the resumption of the trade war will be harmful to oil prices in the long term.
Meanwhile, petrol and diesel rates in India have remained unchanged on Monday for over one and a half month, despite volatility in international oil prices. After 4 states increased taxes on fuel, it is expected that more states will follow suit as they look for ways to revive revenue post lockdown.