(Bloomberg) — Oil was little changed near $64 a barrel as a calmer tone returned to global markets, with traders assessing the latest tariff moves from US President Donald Trump as well as possible retaliatory measures.
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Brent flipped between small gains and losses on the back of a three-day decline that was the biggest since 2022, and among the top 20 since the futures began trading in the 1980s.
Stock markets staged a modest recovery early on Tuesday as investors looked for buying opportunities while awaiting clarity on how Trump’s tariff policies will play out. He has threatened to slap an additional 50% levy on Chinese imports, while Beijing responded by saying it’s prepared to “fight to the end” as the two nations square off.
Crude — along with equities, bonds and other commodities — has been roiled this month as the US president presses on with his aggressive trade policy. The ructions have stoked concerns about a global slowdown or recession that would jeopardize energy demand. At the same time, OPEC+ delivered a bigger-than-expected output hike, hurting the outlook for oil market balances.
Banks have been rushing to cut their forecasts in recent days as a result. Societe Generale SA sees West Texas Intermediate at $57 a barrel by the end of the year, while Goldman Sachs Group Inc. warned of $40 Brent in an extreme case.
The turbulence also forced the US Energy Information Administration to delay its monthly report, which had been due Tuesday. The agency said it was re-running its models to account for the most recent market developments.
“Oil prices witnessed something of a relief rally this morning,” ING analysts Warren Patterson and Ewa Manthey said in a note. “We’re likely to see further escalation, which will only exacerbate growth concerns and worries over oil demand.”
Chinese crude buyers are likely to halt imports of American oil as the trade war drags on, which will include levies imposed by Beijing on US goods, according to local industry consultant JLC. Companies could instead look to source more cargoes from Russia, the Middle East, West Africa and South America, it said.
At the same time, options markets have been showing wagers on lower prices. Record volumes of bearish contracts traded last week, while puts on Brent were fetching their biggest premiums to bullish calls since December 2021.
