(Bloomberg) — Oil extended a volatile run as investors grappled with abrupt shifts in US trade policy, with futures returning to losses after a brief relief rally ignited by President Donald Trump’s decision to pause some tariffs.
Brent (BZ=F) fell below $64 a barrel after a choppy session that saw prices hit a four-year low before ultimately posting the biggest one-day gain since October. With markets in turmoil, Trump announced a 90-day halt on higher tariffs against dozens of nations, but he also raised duties on China to 125%. Beijing’s top leaders are poised to meet Thursday to discuss additional stimulus.
“With a lot of uncertainty still existing, the prospect for a major rebound in crude is not possible at this stage when the market has to deal with the risk of weakening demand and rising production from OPEC,” said Ole Hansen, head of commodities strategy at Saxo Bank. “We are still looking at the worst tariffs since the 1930s.”
As of 7:50:07 AM EDT. Market Open.
Oil prices are dramatically lower compared to the start of the month as the aggressive US tariff push sparked warnings of a global recession that would depress energy demand. At the same time, the OPEC+ alliance committed to loosening output curbs at a faster pace that expected, spurring concerns about a bigger global glut.
China is the largest oil importer, and the higher US levies may weigh on the nation’s consumption of fuels and petrochemicals. Even before Trump’s return to the White House, usage of gasoline and diesel had been contracting, in part because of a drawn-out property crisis, and in part because of the spread of electric vehicles and renewables.
As of 7:50:05 AM EDT. Market Open.
In a reflection of the nation’s deep-seated economic challenges, data earlier on Thursday showed that consumer deflation extended for a second month in March, while factory deflation persisted for a 30th month. A ad-hoc leaders’ meeting is set to focus on support measures for areas including housing and consumer spending, according to people familiar with the matter.
Parts of oil’s futures curve remain in contango, a bearish pricing pattern that’s characterized by nearer-term contracts trading at a discount to longer-dated ones. Brent for March 2026 traded below rates for the following three months.
“We may expect oil prices to resume their broader downward trend once the optimism around recent tariff reprieve fades,” said Yeap Jun Rong, market strategist at IG Asia Pte. “Demand-side headwinds persist, with China’s growth outlook at risk from ongoing tit-for-tat.”
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