Oil prices stabilised on Tuesday, maintaining their positions near four-year lows as the continuing trade conflict between the US and China overshadowed gains seen in equity markets.
This comes amid rising concerns about a possible recession affecting global economic growth. Brent crude futures recorded a slight increase to $64.34 per barrel, while US West Texas Intermediate (WTI) crude futures rose to $60.88, reported Reuters.
These minor gains follow significant declines of 14% and 15% for Brent and WTI, respectively, observed on Monday. The drop was triggered by US President Donald Trump’s 2 April declaration of new “reciprocal tariffs” on imports.
In response, China has stated its intention to resist what it calls US “blackmail,” affirming it would not yield after Trump threatened a further 50% tariff on Chinese goods if retaliation continued.
The situation has been exacerbated by China’s commerce ministry assertion of its resolve to “fight to the end.” This stance has raised concerns over the global economic outlook, as highlighted by SEB analyst Ole Hvalbye, who noted the heightened risk of recession negatively impacting global oil demand.
Early trading saw oil prices rise by 1%, which ING’s Warren Patterson attributed to a relief rally following improved equity market stability. Patterson remarked on the market’s significant sell-off in recent days as it adjusts for an expected substantial demand impact.
On the financial forecasting front, Goldman Sachs revised its expectations for Brent and WTI crude under various scenarios.
The firm projected Brent could reach $62 per barrel and WTI $58 by December 2025, assuming significant tariff reductions and a moderate increase in supply from eight OPEC+ members.
Conversely, within a traditional US recession context under their baseline projection for OPEC, Brent prices are forecasted to drop to $58 by December 2025.
Goldman Sachs adjusted its annual average price forecasts downward for Brent and WTI crude for 2026 amid increased concerns regarding recession risks and potential higher-than-anticipated supply from OPEC+.
In scenarios involving global GDP slowdowns with unchanged OPEC baselines, further declines in Brent prices are estimated should these conditions persist.
