Shafaq News/ Oil prices plunged 7%on Friday to settle at their lowest in over three years as China ramped uptariffs on U.S. goods, escalating a trade war that has led investors to pricein a higher probability of recession.
China, the world's top oil importer,announced it will impose additional tariffs of 34% on all U.S. goods from April10. Nations around the world have readied retaliation after Trump raised tariffto their highest in more than a century.
Commodities including natural gas,soybeans and gold also dived, while global stock markets tumbled. Investmentbank JPMorgan said it now sees a 60% chance of a global economic recession byyear-end, up from 40% previously.
Global benchmark Brent futuressettled $4.56, or 6.5%, lower at $65.58 a barrel, while U.S. West TexasIntermediate crude futures lost $4.96, or 7.4%, to end at $61.99.
At the session low, Brent fell to$64.03 and WTI hit $60.45, their lowest in four years.
For the week, Brent was down 10.9%,its biggest weekly loss in percentage terms in a year and a half, while WTIposted its biggest decline in two years with a drop of 10.6%.
"To me, this is probably closeto fair value in crude until we get some sort of indication of how much demandhas actually been reduced by," said United ICAP Energy Specialist ScottShelton.
"My opinion is we probably willend up in the mid to high $50s in the near term for WTI," Shelton said,warning that demand would suffer under the current market circumstances.
Trump's new tariffs are "largerthan expected" and the economic fallout, including higher inflation andslower growth, likely will be as well, Federal Reserve Chair Jerome Powell saidin remarks that pointed to the potentially difficult set of decisions ahead forthe U.S. central bank.
OPEC+ INCREASES
Further pressuring oil prices, theOrganization of the Petroleum Exporting Countries and allies (OPEC+) decided toadvance plans for output increases. The group now aims to return 411,000barrels per day (bpd) to the market in May, up from the previously planned135,000 bpd.
A ruling by a Russian court that theCaspian Pipeline Consortium's (CPC) Black Sea export terminal facilities shouldnot be suspended also pressured prices lower. That decision could avert apotential fall in Kazakhstan's oil production and supplies.
Imports of oil, gas and refinedproducts were given exemptions from Trump's sweeping new tariffs, but thepolicies could stoke inflation, slow economic growth and intensify tradedisputes, weighing on oil prices.
Goldman Sachs analysts respondedwith sharp cuts to their December 2025 targets for Brent and WTI by $5 each to$66 and $62 respectively.
"The risks to our reduced oilprice forecast are to the downside, especially for 2026, given growing risks ofrecession and to a lesser extent of higher OPEC+ supply," the bank's headof oil research, Daan Struyven, said in a note.
HSBC trimmed its 2025 global oildemand growth forecast from 1 million bpd to 0.9 million bpd, citing tariffsand the OPEC+ decision.
Money managers raised their net longU.S. crude futures and options positions in the week to April 1, the U.S.Commodity Futures Trading Commission (CFTC) said on Friday.
(REUTERS)