By Scott DiSavino
NEW YORK (Reuters) – Oil prices eased about 1% to a near four-year low on Monday on worries U.S. President Donald Trump’s latest round of trade tariffs could push economies around the world into recession and reduce global demand for energy.
The session was marked by extreme volatility with prices in intraday trade down more than $3 a barrel overnight and up over $1 Monday morning following reports of what the White House called “fake news” that Trump was considering a 90-day pause on tariffs for all countries, except China.
Brent futures were down 79 cents, or 1.2%, to $64.80 per barrel at 10:49 a.m. EDT (1449 GMT), while U.S. West Texas Intermediate (WTI) crude futures were down 75 cents, or 1.2%, to $61.24.
That puts both benchmarks on track for their lowest closes since April 2021.
Trump’s sweeping tariff plans battered global markets after he said foreign governments would have to pay “a lot of money” to get the levies removed.
Officials in Europe said the European Union and the U.S. would eventually end up reaching an agreement on trade.
“Sooner or later, we will sit at the negotiation table with the U.S. and find a mutually acceptable compromise,” EU trade commissioner Maros Sefcovic told reporters.
Goldman Sachs forecast a 45% chance of recession in the U.S. over the next 12 months and made downward revisions to its oil price projections. Citi and Morgan Stanley also cut their Brent outlooks. JPMorgan said last week that it sees a 60% probability of recession in the U.S. and globally.
Saudi Arabia on Sunday announced sharp cuts to crude oil prices for Asian buyers, dropping the price in May to the lowest level in four months.
“It’s a demonstration of the belief that tariffs will hurt oil demand,” said PVM analyst Tamas Varga. “It goes to show the Saudis, just like every man and his dog, expect the supply and demand balance to be affected and they are forced to cut their official selling prices.”
Responding to Trump’s tariffs, China said on Friday that it would impose additional levies of 34% on American goods, confirming investor fears that a full-blown global trade war has begun.
Imports of oil, gas and refined products were given exemptions from Trump’s sweeping new tariffs, but the policies could stoke inflation, slow economic growth and intensify trade disputes, weighing on oil prices.
Adding to the downward momentum, the OPEC+ group comprising the Organization of the Petroleum Exporting Countries and its allies decided to advance plans for output increases. The group now aims to return 411,000 barrels per day to the market in May, up from the previously planned 135,000 bpd.
At the weekend, OPEC+ ministers emphasised the need for full compliance with oil output targets and called for over-producers to submit plans by April 15 to compensate for pumping too much.
(Reporting by Scott DiSavino in New York, Anna Hirtenstein and Robert Harvey in London; additional reporting by Mohi Narayan in New Delhi and Yuka Obayashi in Tokyo. Editing by David Goodman and Mark Potter)
