US-China tariff escalation poses downside risks for oil market, potential impact on demand.

From Investing.com: 2025-04-08 01:18:00

Trade tensions between the US and China are raising downside risks for commodities. President Trump threatens a 50% tariff on Chinese goods if retaliatory tariffs aren’t lifted. This could escalate further, impacting oil demand and exacerbating growth concerns. OPEC+ supply increases and tariff impacts may strengthen the Brent-Dubai spread.

The crude oil market has seen a significant sell-off since April 2, indicating recession fears. OPEC+ may need to pause or reverse supply increases if downward pressure continues. Slowing US drilling activity could support prices, as WTI prices may lead to a decline in output. European gas prices are down, with funds reducing their net long positions.

Gold prices fell below $3,000/oz on Monday, driven by broader market sell-offs. China’s central bank continued to add gold to its reserves in March, despite record-high prices. Central banks are expected to increase gold allocations amid geopolitical tensions and economic uncertainty, supporting prices.

USDA reports a steady start for corn plantings, in line with the five-year average. Winter wheat crop conditions deteriorated due to less rain. Weather in West Africa remains uncertain, with some regions experiencing favourable conditions while others face delays. Nigeria’s mid-crop harvest is expected in mid-July.



Read more at Investing.com: Oil Faces Downside Risks as US-China Tariff Battle Escalates