Oil surged more than 4% in a stunning reversal on Wednesday after President Trump announced a tariff pause on non-retaliatory countries, while increasing levies on China-made imports.
West Texas Intermediate (CL=F) rose more than 4% to settle at $62.35 per barrel, reversing losses of more than 5% in early trading. Brent (BZ-F), the international benchmark, settled above $65 after piercing below $60 during the session.
The reversal came after Trump placed a 90-day pause on his reciprocal tariff plans while keeping the 10% duties that went into effect last weekend on most of the world.
“These Countries have not, at my strong suggestion, retaliated in any way, shape, or form against the United States, I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately,” Trump posted.
Trump also said he would be unilaterally raising the rate on China further to 125% because of “the lack of respect that China has shown.”
Earlier in this day, China — the biggest import of crude — announced it would implement 84% tariffs on US-made goods, raising concerns of a recession and slowing demand.
On Wednesday afternoon, as the S&P 500 (^GSPC) soared and the Nasdaq Composite (^IXIC) ripped 10% higher on the heels of the tariff pause, Goldman Sachs analysts wrote, “we are reverting to our previous non-recession baseline forecast with GDP growth of 0.5% and a 45% probability of recession.”
Up until the late afternoon rally, crude was hovering at four-year lows, trading below the $60 level.
Oil is still down roughly 13% since Trump revealed sweeping retaliatory tariffs on April 2.
Crude prices also came under pressure after the Organization of Petroleum Exporting Countries last week announced it would increase its output in May, raising concerns of oversupply.
Ines Ferre is a Senior Business Reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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