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New York/Singapore — Oil prices fell for a second day on Tuesday, as concerns mounted over a potential US recession, the effect of tariffs on global growth and as Opec+ sets its sights on ramping up supply.
Brent futures fell 6c, or 0.1%, to $69.22 a barrel at 4.02am GMT, while US West Texas Intermediate (WTI) crude futures lost 13c, or 0.2%, to $65.90 a barrel.
US President Donald Trump’s protectionist policies have roiled markets across the world, with Trump imposing and then delaying tariffs on his country’s biggest oil suppliers, Canada and Mexico, while also raising duties on Chinese goods. China and Canada have responded with tariffs of their own.
At the weekend, Trump said a “period of transition” for the economy was likely but declined to predict whether the US could face a recession amid stock market concerns about his tariff actions
“Trump’s comments triggered a wave of selling as investors started pricing in the risk of weaker growth in demand,” Daniel Hynes, senior commodity strategist at ANZ said.
Stocks, which crude prices often follow, slumped on Monday, with all three major US indices suffering sharp declines. The S&P 500 had its biggest one-day drop since December 18 and the Nasdaq slid 4.0%, its biggest single-day percentage drop since September 2022.
US commerce secretary Howard Lutnick said on Sunday Trump would not let up pressure on tariffs on Mexico, Canada and China.
On the supply front, Russia’s deputy prime minister Alexander Novak said on Friday the Opec+ group agreed to start increasing oil production from April, but could reverse the decision afterwards if there were market imbalances.
Despite the market noise, Brent at about $70 a barrel was quite a strong support and oil prices may look to stage a technical bounce at current levels, said Suvro Sarkar, energy sector team lead at DBS Bank, adding that the Opec+ supply response would continue to remain flexible depending on market conditions.
“If oil prices fall below the $70 per barrel mark for an extended period, output hikes may be paused in our opinion. Opec+ will also keep a careful eye on Trump’s Iran and Venezuela policies,” he said.
“The US has already taken back Chevron’s licence to operate in Venezuela and it remains to be seen whether Iran sanctions will be intensified. However, in the interim, worries about global growth amid policy uncertainties and trade wars will dominate.”
In the US, crude oil stockpiles were expected to have risen last week, while distillate and gasoline inventories likely fell, a preliminary Reuters poll showed on Monday.
The poll was conducted ahead of weekly reports from industry group the American Petroleum Institute, due at 8.30pm GMT on Tuesday, and the Energy Information Administration, the statistical arm of the US department of energy, at 2.30pm GMT on Wednesday.
Reuters
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