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Weekly Oil Prices

Cost of oil plunges as US tariffs trigger recession fears.

Fears that Donald Trump's new trade tariffs could trigger a global recession have sent oil prices plummeting. Major stock indexes also plunged as U.S. President Donald Trump showed no sign of backing away from his sweeping tariff plans. Wall Street banks sounded the alarm on high recession probabilities with commodities on the receiving end of these tariff-related worries about growth and demand.

As volatility continues to rise, we are going through a major deleveraging phase," said Ole Hansen, head of commodity strategy at Saxo Bank. "Positions in commodities are being reduced across the board."

Oil prices plunged to an even deeper four-year low on Wednesday after China announced additional tariff measures on US goods in retaliation against the President's trade policy. China will impose 84 per cent tariffs from Thursday, up from the previously announced 34 per cent, the finance ministry said.

Brent Crude dropped on the news to $59 a barrel while West Texas Intermediate (WTI) crude slipped to $56.

In addition, exacerbating oil's decline was a decision last week by the OPEC+ group of producers to raise output in May by 411,000 barrels per day, which analysts say is likely to push the market into surplus.

'Some US analysts suggested that the White House wants to drive oil prices closer to $50 as the administration believes that the US oil and gas industry can survive a period of disruption,' said Panmure Liberum analyst Ashley Kelty. 'We see this goal as somewhat delusional... and (it) will merely see US production shut in and open the door for OPEC to reclaim its position as the swing producer.'

However, there was some recovery yesterday, as stocks surged to one of their biggest daily gains since the second world war after Donald Trump paused his tariffs against most nations except China, as investors had desperately hoped he would. Trump, though, did raise tariffs on China to 125%. Naturally, oil prices followed suit and rallied on news of the pause.

Goldman Sachs now forecasts that Brent and WTI could edge down to $62 and $58 a barrel respectively by December 2025 and to $55 and $51 by December 2026. Since 2022, the price of WTI crude oil has generally stayed between $65 and $95 a barrel.

The outlook for oil prices seems to lean to the low side as we grapple with an unreliable US trade policy which is likely to cause ongoing volatility during the weeks and months ahead.

In the meantime, welcome news as fuel card users can expect a fall of between 3-4 pence per litre as we head towards the Easter holidays.

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