Oil down on Monday

Oil prices extended last week’s losses on Monday, with West Texas Intermediate (WTI) crude, a key US benchmark, falling 4 per cent amid escalating trade tensions between the US and China, stoking fears of a recession and reduced crude demand.

WTI, which is known for its relatively low sulfur content, dropped $2.5, or 4.03 per cent, to $59.49 a barrel. Meanwhile, Brent crude fell $2.54, or 3.9 per cent, to $63.04 a barrel, both reaching their lowest levels since April 2021.

Last week, oil prices plummeted 10 per cent, with Brent down 10.9 per cent and WTI 10.6 per cent, as China imposed new tariffs on US goods, exacerbating concerns about a global trade war.  Moreover, the announcement of US tariffs on Chinese imports led to fears of inflation and slower growth, with Federal Reserve Chair Jerome Powell warning of significant economic fallout.

Additionally, OPEC+ plans to accelerate output increases, aiming to return 411,000 barrels per day (bpd) to the market in May, up from the previously planned 135,000 bpd. This potential surge in supply, reversing previous cuts, adds downward pressure on prices. Geopolitical tensions also persisted, with Iran rejecting US demands for nuclear talks and Russia intensifying military operations in Ukraine.

Attribution: Reuters

Subediting: M. S. Salama