Global oil prices lost over 8% on Thursday and headed for the fourth daily drop in a row, plumbing four-year lows and on track for the heftiest weekly loss since March 2023 as the global trade war erupted.
It comes after China announced retaliatory tariffs on all US products in response to similar tariffs imposed by US President Donald Trump this week.
Prices are also pressured by OPEC+ surprise production hike next month, in addition to a surge in US crude stocks last week.
Prices
US crude oil price fell 8.6% to $60.83 a barrel, the lowest since April 2021, with a session-high at $66.86.
Brent tumbled 8.25% today to $64.22 a barrel, the lowest since April 2021, with a session-high at $70.08.
On Thursday, US crude fell 5.8%, while Brent gave up 4.8%, the heftiest daily loss since July 2022.
Weekly Trades
Oil prices are down 11.5% so far this week, the first weekly loss in a month, and the heftiest since March 2023.
Global Trade War
China announced 34% retaliatory tariffs on all American imports starting April 10, in the first Chinese response to Trump’s tariffs.
The world economy is being shaken by the most aggressive US tariffs in over a century, leading to a steep drop in global stocks.
US President Donald Trump announced new historic reciprocal tariffs on many countries, that start with a base 10% and rise by many folds depending on the country.
He described the new tariffs as “a declaration of independence” and today as the “liberation day”.
Trump said the new tariffs are pivotal to bring back wealth to the United States, and he believes the 1929 Great Depression wouldn’t have happened if tariffs were kept.
He imposed 34% additional tariffs on China, 24% on Japan, 20% on the EU, 46% on Vietnam, 26% on India, 32% on Taiwan, 10% on the UK.
The EU has also vowed to respond, which could trigger further stock meltdowns and slower worldwide growth and lower fuel demand.
OPEC+
OPEC+ officially announced a production hike by more than expected in May, due to improving market indicators and higher crude demand.
The alliance said it’ll enact a production hike equivalent to three months of scheduled increases, surpassing previous expectations of a cut focused on May alone.
Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman convened virtually to discuss global market conditions, with the group agreeing on raising output by 411 thousand bpd, sharply above estimates of a 140 thousand bpd hike.
US Stocks
The Energy Information Administration reported a buildup of 6.2 million barrels in US crude stocks last week to 439.8 million barrels, while analysts expected a drop of 0.7 million barrels.
Gasoline stocks fell by 1.6 million barrels to 237.6 million barrels, as distillate stocks rose by 0.3 million barrels to 114.6 million barrels.
