Crude prices recorded some gains in mid-day trading on Tuesday, April 8, settling at their lowest levels since April 2021, after a wave of declines exceeding 15% since President Trump announced tariffs last week. Nymex crude is trading up about 0.67% at $61.10 a barrel, while Brent crude is trading at $64.54 a barrel, up about 0.51%.
Market concerns about a potential global economic recession have increased with the tariffs announced by the White House at the end of last week, which took effect on April 5. The tariffs, which include 34% on China, 24% on Japan, and 20% on the European Union, have increased. China announced a 34% tariff increase on US goods inretaliation for Trump’s tariffs, heightening market uncertainty amid fears of a direct impact on energy demand.
Global investment institutions and banks have lowered their oil price forecasts following these tariffs, led by Goldman Sachs, Citigroup, Morgan Stanley, and JPMorgan. Goldman Sachs believes that crude prices could fall
below $40 per barrel under these extreme conditions, the escalation of trade tensions, and increased supplies.
Saudi Arabia announced sharp price cuts for Asian buyers this weekend, causing May prices to fall to their lowest level in four months. OPEC and its non-OPEC allies, led by Russia, also decided to continue their plan to increase production and resume pumping 411,000 barrels in May, up from the previously planned 135,000 barrels.
In a related development, President Trump announced on Monday that the United States and Iran were close to starting direct talks regarding Tehran’s nuclear program, before the Iranian foreign minister confirmed that the discussions would be indirect.
Crude markets are awaiting the American Petroleum Institute’s preliminary crude oil inventory report today, ahead of the official Energy Information Administration’s report tomorrow, Wednesday. Estimates indicate that inventories may have risen by 1.6 million barrels last week.
13/04/2025
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