FILE PHOTO: A views shows an oil drilling rig at Zhetybay field in the Mangystau region, Kazakhstan.
| Photo Credit:
TURAR KAZANGAPOV
Oil sank after Saudi Arabia slashed its flagship crude price by the most in more than two years, and the escalating trade war spurred concerns about a global recession and weaker energy demand.
Brent fell by almost 4% to $63.01 a barrel, a four-year low, before paring losses, while West Texas Intermediate was at $60.63. Saudi Aramco lowered Arab Light crude to its biggest buyers in Asia more than expected for May, moving just days after OPEC+ announced a surprisingly large output hike.
“Markets are beginning the week still in the throes of panic,” said Vandana Hari, founder of Vanda Insights in Singapore. “No one dares pick a bottom” and “stand in the way of the selling tsunami,” she said.
Market metrics signal conditions are loosening. The spread between Brent for this December and the same month in 2026 flipped into contango briefly, with the nearer contract below the longer-dated one. That’s a bearish structure.
Oil — along with other industrial and agricultural commodities, as well as equities — has been driven sharply lower as the wave of tariffs, plus retaliation from China, torpedoed appetite for risk. Crude’s losses were exacerbated by the surprise move by the OPEC+ alliance to increase production by more than had been expected. The combination of risks to crude demand, coupled with additional output, has revived concerns about a global surplus.
“It’s going to remain downhill by default for all risk assets until Trump says or signals something that prompts investors to pause and reassess their recession fears,” said Hari.
Trump had pressed OPEC+ “to cut the price of oil,” which he says is needed to reduce inflation and heighten pressure on Russia to help end the war in Ukraine. Saudi Arabia also pared prices for the US and Europe, though the reduction was much smaller than for Asian buyers.
Among products, gasoline futures fell by almost 3% in New York, hitting the lowest level since February.
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Published on April 7, 2025
