Oil tumbles further as US-China trade tensions fuel recession fears
Shafaq News/ Oil prices slid morethan 3% on Monday, extending last week's losses, as escalating trade tensionsbetween the United States and China stoked fears of a recession that wouldreduce demand for crude.
Brent futures declined $1.41, or2.15%, to $64.17 a barrel at 0514 GMT, while U.S. West Texas Intermediate crudefutures lost $1.35, or 2.18%, to $60.64. At the session low, both benchmarkswere down over 3% and hit their lowest levels since April 2021.
Oil plunged 7% on Friday as Chinaramped up tariffs on U.S. goods, escalating a trade war that has led investorsto price in a higher probability of recession. Last week, Brent lost 10.9%,while WTI dropped 10.6%.
"It's hard to see a floor forcrude unless the panic in the markets subsides and it's hard to see thathappening unless Trump says something to arrest snowballing fears over a globaltrade war and recession," said Vandana Hari, founder of oil marketanalysis provider Vanda Insights.
Responding to U.S. President DonaldTrump's tariffs, China said on Friday it would impose additional levies of 34%on American goods, confirming investor fears that a full-blown global trade waris underway.
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.
Federal Reserve Chair Jerome Powellsaid on Friday that Trump's new tariffs are "larger than expected,"and the economic fallout including higher inflation and slower growth likelywill be as well.
Adding to the downward momentum, 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.
"This potential influx ofsupply, reversing cuts maintained over the past two years, represents a majorshift in market dynamics and acts as a significant headwind for prices,"said Sugandha Sachdeva, founder of SS WealthStreet, a New Delhi-based researchfirm.
Over the weekend, top OPEC+ministers stressed the need for full compliance with oil output targets andcalled for overproducers to submit plans by April 15 to compensate for pumpingtoo much.
On the geopolitical front, Iran onSunday rejected U.S. demands that it hold direct nuclear talks or face strikes.Russia claimed to have captured Basivka in Ukraine's Sumy region and said itsforces were attacking multiple nearby settlements.
(REUTERS)
