Oil Heads for Second Weekly Loss amid Recession Fears

Oil is heading for a second weekly loss amid escalating turmoil in global markets due to US President Donald Trump's escalating trade policy, which has raised fears of a global recession and a mass flight from risky assets.

Brent crude fell below $63 a barrel, a 4% decline this week, after hitting a four-year low. West Texas Intermediate (WTI) crude traded near $59.

Latest Oil Prices:

WTI Crude $59.80 -0.45%

Brent Crude $63.10  -0.36%

Murban Crude $64.45  -0.74%

Louisiana Light $65.08  +4.40%

Bonny Light $78.62  -2.84%

Opec Basket $63.40  -4.72%

Mars US $72.90  -1.51%

Gasoline $1.951  -0.51%

Natural Gas $3.521 -1.01%

This decline came amid heavy selling across US stocks, bonds, and the dollar amid growing concerns about the impact of US tariffs, particularly those imposed on China, the world's largest importer of crude oil.

Key indicators in the oil market are showing clear signs of weakness, with the decline accelerating this month. Among these indicators is the return of a contango structure to parts of the futures curve, a negative pricing pattern that signals expectations of future price declines.

Oil has lost around 16% since the beginning of April, amid a massive sell-off that has affected most commodities. The US tariffs include punitive duties of 145% on imports from China, which has responded with counter-tariffs, further escalating tensions between the world's two largest economies.

The OPEC+ alliance's decision to ease production restrictions has also contributed to increased pressure on crude prices.

Sharu Chanana, chief investment strategist at Saxo Markets, said: "We are clearly heading towards a zero-sum trade war, and the resulting blow to global growth is starting to impact both sentiment and physical demand in the oil market. While the sell-off in the dollar and Treasuries has yet to fully spill over into oil assets, investors should closely monitor this."

Earlier this week, the US lowered its forecast for global oil demand growth amid growing concerns about consumption and a deteriorating economic outlook.

The Energy Information Administration now projects global consumption to rise by only about 900,000 barrels per day in 2025, about 400,000 barrels less than last month's estimate.

The decline in oil prices has also led to a decline in oil-related products, with US gasoline futures falling about 5% this week.