DTN Oil Update
Oil Futures Slumped as Trade Tensions Mount
TACOMA, Wash. (DTN) -- Oil futures plummeted Tuesday for the fourth straight session to multi-year lows, with NYMEX WTI futures contract for May delivery trading below the $59 mark, pressured by escalating trade friction and mounting fears of a U.S. recession alongside a broader global slowdown.
On the New York Mercantile Exchange, the front-month WTI crude contract for May delivery settled at $58.82 barrel (bbl), down $1.88 from Monday while ICE Brent crude for June delivery plunged by $2.09 to settle at $62.12 bbl,.
In refined products, RBOB gasoline for May settled at $1.9764 gallon, a decrease of $0.0437 while the front-month ULSD dropped by $0.0341 to $2.0358 gallon.
The U.S. Dollar Index settled at 102.595, down 0.377 points on the session.
Traders continue to monitor the effects of a 10% global tariff imposed by the U.S. on all imports, which officially took effect Saturday, April 5.
"China will take necessary measures to resolutely safeguard its lawful rights and interests. If the United States ignores the interests of the two countries and the international community and insists on fighting tariff wars and trade wars, China will surely fight till the end," a spokesperson for China's foreign ministry said Tuesday, according to the Xinhua news agency.
China's Customs Tariff Commission announced Friday it would implement a 34% retaliatory tariff on all U.S. goods starting April 10. U.S. President Donald Trump countered with a threat to impose a further 50% tariff on Chinese imports and suspend talks if Beijing does not roll back its planned measures.
On Monday, EU trade ministers met to coordinate a response to the U.S. steel and aluminum tariffs and reiterated interest in negotiating a zero-tariff trade pact, according to media coverage.
These moves follow the U.S. implementation of a baseline 10% tariff on all trading partners, along with targeted tariffs specifically affecting Chinese and EU exports.
The Trump administration also raised the existing tariffs on Chinese goods from 20% to 34%, while EU imports are set to face a 20% tariff, and Japanese goods a 24% levy. These new tariffs are scheduled to take effect on April 9. For now, Canada and Mexico remain exempt.
Concerns over the economic fallout from the trade standoff have prompted some analysts to revise down U.S. GDP projections, citing the risk of a recession.
Continued pressure is expected from additional supply after OPEC+ confirmed a production increase of 2.2 million barrels per day (bpd) that began last week.
OPEC's Joint Ministerial Monitoring Committee (JMMC) convened by videoconference on Saturday, April 5, to review January and February production levels and reaffirmed its commitment to tracking compliance with previously agreed output cuts.
