Oil Resumes Losses As Trade War Worries Resume
Oil extended its volatile run as investors grappled with a sudden shift in U.S. tariff policy, with futures retreating after a brief rally sparked by President Donald Trump’s decision to halt some levies.
Brent fell below $65 a barrel, after posting its best one-day gain since October, while West Texas Intermediate neared $62. With markets in turmoil, Trump abruptly announced a 90-day halt to higher tariffs that have hit dozens of countries, but he also raised duties on China to 125%.
“Given the possibility of a de-escalation of the U.S.-China trade war in the near term, the recovery is unlikely to turn into a decisive reversal of the trend,” said Zhou Mi, an analyst at Chaos Research Institute in Shanghai.
Oil has hit a four-year low as an aggressive U.S. tariff push has sparked warnings of a global recession that will hurt energy demand. At the same time, the OPEC+ alliance has committed to easing production curbs at a faster pace than expected, fueling concerns about a wider global glut.
China is the biggest oil importer, and higher U.S. levies could weigh on the country’s fuel and petrochemical consumption. Even before Trump returned to the White House, gasoline and diesel use had been contracting, partly because of a protracted housing crisis and partly because of the spread of electric vehicles and renewable energy.
In a reflection of the country’s deepening economic challenges, data on Thursday showed consumer deflation continued for a second month in March, while factory deflation persisted for 30 months.
Parts of the oil futures curve remain in contango, a bearish price pattern characterized by short-term contracts trading at a discount to longer-term contracts. For Brent, March 2026 prices are trading below prices for the next three months. Crude prices rose again on Wednesday despite figures showing U.S. commercial inventories rose to their highest since July.
Brent for June delivery fell 0.8% to $64.93 a barrel as of 10:05 a.m. in Singapore.
On Wednesday, it hit an intraday low of $58.40, before ending the session up 4.2%.
WTI for May delivery fell 0.6% to $61.89 a barrel
Source: Bloomberg
