Brent crude prices have plunged to their lowest levels in over four years, dropping to $60.9 per barrel, a decline of $4 since yesterday.
This marks the lowest price since early February 2021, according to Ole R. Hvalbye, a commodities analyst at Skandinaviska Enskilda Banken AB (SEB).
The analyst attributes the ongoing downturn to continued market instability driven by the U.S. president’s newly imposed “reciprocal” tariffs, particularly the 104% tariff on Chinese goods that took effect today.
Tariff Concerns and Market Instability
Hvalbye highlights that the escalating trade war is significantly impacting market sentiment, with the tariffs undermining risk appetite. The global oil market, along with broader commodities and equities, are all suffering as a result of the increasing trade tensions. Without signs of de-escalation, the risks remain firmly skewed to the downside, with fears of weaker global oil demand and the OPEC+ decision to ease output more quickly than expected further exacerbating concerns of oversupply in the oil market.
Impact on U.S. Shale Oil Production
West Texas Intermediate (WTI) crude also saw a sharp decline, falling to $56.7 per barrel. These levels are particularly concerning, as many U.S. shale producers need prices above $50 per barrel to remain profitable. If WTI stays in the low $50s, analysts predict a potential slowdown in U.S. oil production in the coming months.
Additionally, American Petroleum Institute (API) data showed a one-million-barrel draw in U.S. crude inventories, which contrasts with the Bloomberg consensus of a 1.7-million-barrel build, offering some relief but not enough to reverse the downward trend in oil prices.
Alexander Stefanov
Reporter at Coindoo
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over 8 years of experience covering the crypto, blockchain and fintech industries, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics.
Source: https://coindoo.com/brent-hits-4-year-low-amid-tariff-driven-market-turmoil/