Oil prices fell to their lowest level in more than four years in the first operations on Wednesday due to the growing concerns about the demand promoted by a growing tariff war between the United States and China, the two greatest economies in the world, and a perspective of increasing supply.
Brent’s futures fell 3.39% to $ 60.69 per barrel at 7:08 p.m., time in central Mexico, and the future West Texas intermediate (WTI) from the US fell 3.96% to 57.22 dollars.
Brent touched its minimum since March 2021 and the WTI its minimum since February 2021.
Both reference indices have fallen into five consecutive sessions since President Donald Trump announced radical tariffs about most imports, which generated fears that a world commercial war would affect economic growth and would affect the demand for fuel.
Lee: Bags in China open with losses to tariff climbing against Beijing
The United States will impose a 104% tariff to China from Wednesday, said a White House official at a press conference on Tuesday, adding 50% more to tariffs after Beijing failed to lift their retaliation tariffs on US products before the deadline of the Tuesday established by Trump.
Beijing promised not to give in to what he called American blackmail after Trump threatened to impose an additional 50% tariff on Chinese products if the country did not raise their 34% retaliation tariff.
“The aggressive retaliation of China decreases the possibilities of a quick agreement between the two largest economies in the world, which generates growing fears of economic recession worldwide,” said Ye Lin, vice president of markets for oil raw materials in Rystad Energy.
“The growth of China’s oil demand, from 50,000 to 100,000 barrels per day (BPD) is at risk if the commercial war continues for longer; however, a stronger stimulus to boost internal consumption could mitigate losses,” he said.
Lee: Trump raises tariffs to China up to 104% for Beijing reprisals
What aggravated oil drop was the decision of last week of OPEC+, which groups the organization of oil exporting countries and its allies, including Russia, to increase production in May by 411,000 BDP, a measure that, according to analysts, will probably push the market to a surplus.
Goldman Sachs now forecasts that Brent and WTI could fall to $ 62 and $ 58 per barrel in December 2025 and 55 and 51 dollars per barrel in December 2026.
As oil prices sank, the price of spo Blend oil in Russia fell below the western price limit of $ 60 per barrel for the first time on Monday.
In a positive signal for demand, the data of the American Petroleum Institute Industrial Group showed that the United States crude oil inventories fell into 1.1 million barrels in the week that ended on April 4, compared to the expectations of a reuters survey of an increase of around 1.4 million barrels.
The official data of the Inventory of Energy Information Administration will be published on Wednesday.
With Reuters information
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