London (Reuters)-Petroleum prices record new losses on Monday, falling 3%, as traded by commercial tensions between the United States and China feeds fears of a recession that would reduce oil demand, while OPEC+ prepares an increase in supply.
The reference values of Brent and WTI have fallen at the lowest level since April 2021.
Brent futures lost US $ 1.74, or 2.65%, to US $ 63.84 per barrel at 7:55 am (GMT), while US gross oil (WTI) fell $ 1.64, or 2.65%to $ 60.35.
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Oil plummeted 7% on Friday after China raised tariffs on US products, scaling into a trade war that led investors to pricing a greater probability of recession. Last week, Brent and WTI lost 10.9% and 10.6%, respectively.
“Uncertainty about tariff policy is still very present. Several Wall Street banks are reducing economic projections and pointing out much greater probabilities of recession,” said Harry Tchilingian of Onyx Capital Group. “This is really what is boosting the feeling.”
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On Monday, Goldman Sachs projected a 45% US recession chance over the next 12 months and has revised down in their oil pricing projections. Citi also cut off their perspective for Brent and JPMorgan last week that he sees a 60% probability of recession in the US and worldwide.
On Sunday, Saudi Arabia announced sharp cuts in gross oil prices for Asian buyers, causing the price in May to fall to the lowest level in four months.
“It is a demonstration of the belief that tariffs will damage the demand for oil,” said PVM analyst Tamas Varga.
In response to US President Donald Trump’s fares, China said on Friday that it would impose additional 34% rates on US products, confirming investors’ fears that a complete global trade war started.
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Imports of oil, gas and refined products have been exempt from new Trump fares, but tariff measures can stimulate inflation, slow economic growth and intensify business disputes, weighing on oil prices.
In addition, OPEC+, which includes the organization of oil exporting countries and their allies, has decided to advance the production plans. The group now intends to return 411,000 barrels per day (BPD) to the market in May, above 135,000 BPD planned previously.
Over the weekend, OPEC+ ministers emphasized the need to fulfill full oil production goals and asked producers to present plans until April 15 to compensate for excessive pumping.