Oil sank at the week’s open after Saudi Arabia slashed its flagship crude price by the most in more than two years, and the escalating trade war spurred concerns about a global recession and weaker demand.
Global benchmark Brent dropped by almost 4% to $63.21 a barrel, a four-year low, after slumping 11% last week, while West Texas Intermediate was at $59.79 a barrel. State producer Saudi Aramco will lower Arab Light crude to its biggest buyers in Asia by $2.30 a barrel for May. The move came just days after the OPEC+ alliance announced an unexpectedly large output hike.
US President Donald Trump’s top officials dismissed investors’ fears of inflation and recession, offering no apologies over the weekend for the turmoil sparked by sweeping tariffs. Among countries pushing back, China — the largest crude buyer — has announced retaliatory levies against the US.
Oil — along with other industrial and agricultural commodities, as well as equities — has been driven sharply lower in recent sessions as the wave of tariffs torpedoed appetite for risk. Crude’s losses were exacerbated by the surprise move by the OPEC+ alliance to increase production by more than had been expected. The combination of risks to crude demand, coupled with additional output, has revived concerns about a global surplus.
Trump had pressed OPEC+ “to cut the price of oil,” which he says is needed to reduce inflation and heighten pressure on Russia to help end the war in Ukraine. Saudi Arabia also reduced prices for the US and Europe, though the reduction was much smaller than for Asian buyers.
Oil’s metrics signal conditions are fast becoming less tight. WTI’s prompt spread — the difference between its two nearest contracts — narrowed to 29 cents a barrel in backwardation. That compares with more than 50 cents a week ago.
. Read more on Markets by NDTV Profit.Global benchmark Brent dropped by almost 4% to $63.21 a barrel, a four-year low, after slumping 11% last week. Read MoreMarkets, Bloomberg, Notifications
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