Oil prices have fallen sharply, reaching their lowest level since February 2021. This was caused by concerns about falling demand amid the escalation of the trade war between the US and China, as well as the prospect of increased supply in the market.
Reuters reports, writes UNN.
Details
As of 04:23 GMT (07:23 Kyiv time), Brent crude futures fell by $2.38 (–3.79%) to $60.44 per barrel. American West Texas Intermediate (WTI) lost $2.46 (–4.13%) to $57.12 per barrel. These are the lowest figures since February 2021.
The six-month spread for Brent fell to 79 cents, the lowest level since mid-November. This indicates expectations of a surplus of oil on the market. The spread has fallen by 86% from its peak of $5.69 on January 15, reflecting reduced supply and expectations of a recovery in demand in China.
According to the media, Brent and WTI oil prices have been falling for the fifth session in a row since Trump announced the introduction of large-scale duties on most imports, which caused fears that a global trade war would undermine economic growth and affect fuel demand.
Trump's 104% tariffs on goods from China took effect on Wednesday from 04:01 GMT (07:01 Kyiv time). Beijing vowed not to succumb to what it called "US blackmail" after Trump threatened to impose an additional 50% duty on Chinese goods if the country does not cancel the corresponding 34% levy.
China's aggressive response measures reduce the chances of a quick deal between the world's two largest economies, raising growing concerns about an economic recession around the world
Growth in China's oil demand of 50,000-100,000 barrels per day will be threatened if the trade war lasts longer, but stronger incentives to increase domestic consumption could mitigate the losses
The OPEC+ decision last week to increase production in May by 411,000 barrels per day further exacerbated the fall in oil prices. According to analysts, this step is likely to lead to a surplus of supply on the market.
Let us remind you
Earlier, Bloomberg wrote that analysts at Goldman Sachs Group Inc. predict a fall in the price of Brent oil to slightly below 40 dollars per barrel by the end of 2026.