Oil prices rose 1% on Tuesday but remained near four-year lows due to recession fears fueled by the US-China trade conflict. Brent futures climbed 66 cents to $64.87 a barrel, while US West Texas Intermediate crude futures gained 75 cents to $61.45.
The announcement of “reciprocal tariffs” on all imports by US President Donald Trump on Monday sparked a 14% decline in Brent and a 15% drop in US West Texas Intermediate crude prices. Beijing responded by vowing not to back down, despite Trump’s threat of an additional 50% tariff on Chinese goods.
Goldman Sachs forecasts that Brent and WTI crude prices will hit $62 and $58 a barrel by December 2025, respectively, under different scenarios. J.P. Morgan estimates that the US administration aims to reduce crude prices to $50 or lower.
Despite this, oil prices rose due to a relief rally fueled by steadier equity markets. The market has sold off heavily in recent days as it prices in a significant demand hit. However, the extent of the demand hit is still unclear.
US President Trump also announced that the US and Iran will hold nuclear talks in Oman, which could lead to more oil on the market if successful. A Reuters poll shows that US crude oil and distillate inventories are expected to have risen last week by about 1.6 million barrels, indicating weak demand.
The global economy is under pressure due to the trade conflict, with China’s commerce ministry vowing to fight to the end. This has raised fears of a global recession, where energy demand is declining.
Source: https://www.reuters.com/business/energy/oil-prices-climb-1-after-heavy-us-tariff-driven-selloff-2025-04-08