Oil extended a volatile run as investors grappled with abrupt shifts in US tariff policy. Image used for representation purpose only.
| Photo Credit:
PIXINOO
Oil extended a volatile run as investors grappled with abrupt shifts in US tariff policy, with futures returning to losses after a brief relief rally ignited by President Donald Trump’s decision to pause some levies.
Brent fell below $65 a barrel, after its best one-day gain since October, while west Texas Intermediate was near $62. With markets in turmoil, Trump announced a 90-day halt on higher tariffs against dozens of nations, but he also raised duties on China to 125 per cent. Beijing’s top leaders are poised to meet Thursday to discuss additional stimulus.
“Given the unlikely near-term de-escalation of US-China trade war, the rebound is unlikely to turn into a trend-setting reversal,” said Zhou Mi, an analyst at the Chaos Research Institute in Shanghai.
Oil had hit a four-year low earlier this week as the aggressive US tariff push sparked warnings of a global recession that would depress energy demand. At the same time, the OPEC+ alliance committed to loosening output curbs at a faster pace that expected, spurring concerns about a bigger global glut.
US levies weigh on China’s fuel, petrochemicals consumption
China is the largest oil importer, and the higher US levies may weigh on the nation’s consumption of fuels and petrochemicals. Even before Trump’s return to the White House, usage of gasoline and diesel had been contracting, in part because of a drawn-out property crisis, and in part because of the spread of electric vehicles and renewables.
In a reflection of the nation’s deep-seated economic challenges, data earlier on Thursday showed that consumer deflation extended for a second month in March, while factory deflation persisted for a 30th month. The ad-hoc leaders’ meeting is set to focus on support measures for areas including housing and consumer spending, according to people familiar with the matter.
Parts of oil’s futures curve remain in contango, a bearish pricing pattern that’s characterized by nearer-term contracts trading at a discount to longer-dated ones. Among them for Brent, the price for March 2026 traded below rates for the following three months.
“We may expect oil prices to resume their broader downward trend once the optimism around recent tariff reprieve fades,” said Yeap Jun Rong, market strategist at IG Asia Pte. “Demand-side headwinds persist, with China’s growth outlook at risk from ongoing tit-for-tat.”
More stories like this are available on bloomberg.com
©2025 Bloomberg L.P.
Published on April 10, 2025
