Oil Set for Historic April Selloff
Oil is heading for its worst April ever on signs the U.S.-led trade war is hurting economic growth and energy demand at a time when the OPEC+ alliance has been easing supply curbs.
Global benchmark Brent, which fell below $64 a barrel on Wednesday, has slumped about 15% this month, its biggest loss for the period since the contract began trading in 1988. West Texas Intermediate is back in the $50s.
Data due on Wednesday could confirm a slowdown in U.S. economic growth, after figures showed consumer confidence plunged to a nearly five-year low. In China, factory activity slumped to its worst contraction since December 2023, revealing the early damage from the trade war.
Crude has been battered this month, hitting a four-year low, as U.S. President Donald Trump’s sweeping trade levies, particularly on key importer China, have dampened the outlook for energy consumption. On the supply side, OPEC+ has eased production curbs, with JPMorgan Chase & Co. warning the cartel could accelerate a planned output increase at next week’s meeting.
“I would say Brent is back in the $60 to $65 range over the last couple of weeks,” said Robert Rennie, head of commodity and carbon research at Westpac Banking Corp., citing OPEC+ supply policy, as well as the prospect of flows returning from Kazakhstan. “The next six to eight weeks should start to see a supply build and inventory build.” In the U.S., national commercial crude stocks rose by 3.8 million barrels last week, according to estimates from the American Petroleum Institute, which also saw a modest increase at the key hub in Cushing, Oklahoma. Official data on holdings is due on Wednesday.
Brent for June delivery, which expires Wednesday, fell 0.7% to $63.80 a barrel as of 11:05 a.m. in Singapore.
The more active July contract fell 0.8% to $62.79 a barrel. WTI for June delivery fell 0.8% to $59.95 a barrel. Source: Bloomberg
