Market Turmoil Sparks Decline in Oil Prices Amid Risk-Off Sentiment

Oil prices stabilized after a recent drop, reflecting the movements of equity markets and risk assets amid worries that tariffs and other policies might hinder growth in the largest economy globally.

West Texas Intermediate traded at approximately $66 per barrel following a 1.5% decline on Monday, while Brent crude hovered around $69. On Monday, investors pulled back from all forms of risk as economic anxieties swept across markets in reaction to US President Donald Trump’s ongoing tariff initiatives and geopolitical tumult, although the decline somewhat eased on Tuesday.

Oil has dropped nearly 20% from its peak in mid-January, as Trump’s erratic implementation of tariff increases and efforts to cut federal spending cloud the economic outlook for the world’s leading oil producer and consumer. Additional bearish elements include OPEC+ plans to increase supply along with a slowdown in demand from China, where the government has instructed refiners to shift focus away from producing staple fuels such as diesel and gasoline.

“Ongoing external factors are contributing to lower oil prices, with persistent growth worries fueling a more extensive risk-off atmosphere,” remarked Warren Patterson, head of commodities strategy at ING Groep NV. “A significant deterioration in market sentiment complicates efforts to establish a price floor.”

US Energy Secretary Chris Wright provided a glimmer of optimism, stating that the Trump administration was ready to enforce US sanctions regarding Iranian oil production. He made these comments during the CERAWeek by S&P Global conference in Houston on Monday.

Leaders from some of the world’s top oil and gas producers, including Chevron Corp, Shell Plc, and Saudi Aramco, voiced their robust support for President Trump’s energy dominance agenda at the event. Vitol Group Chief Executive Officer Russell Hardy mentioned that an oil price between $60 and $80 a barrel is a “reasonable” expectation for the coming years.

Prices:
WTI for April delivery showed minimal change at $66.05 a barrel as of 2:26 p.m. in Singapore. Brent for May delivery increased by 0.1% to $69.38 a barrel.

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