By Arathy Somasekhar
Friday, the prices of Houston (Reuters) plunged 7% to settle at the lowest in more than three years, China has increased prices on American goods, degenerating a trade war that led investors at a price in a higher probability of recession.
China, the best world importer in the world, has announced that it would impose additional 34% tariffs on all American products on April 10. Nations around the world have prepared reprisals after Trump has increased the highest price for over a century.
Basic products such as natural gas, soybeans and gold have also plunged, while the world’s stock markets have dropped. The JPMorgan investment bank said that it now sees 60% of the world’s chances of global economic recession by the end of the year, compared to 40% before.
The world reference Brent Futures paid $ 4.56, or 6.5%, down $ 65.58 per barrel, while West Texas intermediate gross contracts lost $ 4.96, or 7.4%, ended at $ 61.99.
At the bottom of the session, Brent fell to $ 64.03 and WTI reached $ 60.45, their lowest in four years.
For the week, Brent fell by 10.9%, his greatest weekly loss in percentage in a year and a half, while WTI posted its greatest decrease in two years with a decrease of 10.6%.
“For me, this is probably close to the fair gross value until we obtain a kind of indication of the reduction in demand,” said Scott Shelton, an ICAP energy specialist.
“My opinion is that we will probably find ourselves in the middle of $ 50 in the short term for WTI,” said Shelton, warning that demand would suffer from the current circumstances of the market.
Trump’s new prices are “larger than expected” and economic repercussions, including higher inflation and slower growth, will probably be, said the president of the federal reserve, Jerome Powell, in remarks that indicated the potentially difficult set of decisions to come for the American Central Bank.
OPEC + Increases
In addition to putting pressure on oil prices, the organization of countries and oil exporting allies (OPEC +) has decided to increase production increases. The group now aims to return 411,000 barrels per day (BPD) to the market in May, against 135,000 BPD previously planned.
A decision by a Russian court according to which the installations of export terminal of the Black Sea of the Caspian Pipeline Consortium (CPC) should not be suspended also down prices. This decision could avoid a potential drop in Kazakhstan oil production and oil supplies.
Imports of oil, gas and refined products have received exemptions from Trump’s new prices, but policies could stir up inflation, slow slowdown in economic growth and intensify commercial disputes, weighing on oil prices.
