Oil prices decreased 7% at the end of trading on Friday, to record the lowest level in the settlement more than three years after China raised customs duties on American goods in response to the fees announced by US President Donald Trump a day before, which led to an increase in a global trade war that investors feared to lead to recession.
China has announced that it would impose additional customs duties of 34% on all American goods starting April 10. Countries all over the world are preparing to respond to Trump raising customs duties to the highest level in more than a century.
JB Morgan investment bank said it now sees a 60% opportunity for a global economic recession by the end of the year, after the percentage was 40% in the past.
Brent crude futures fell $ 4.56, or 6.5% to $ 65.58 a barrel upon settlement, recording the largest weekly loss in a year and a half.
US West Texas Intermediate crude futures decreased $ 4.96, or 7.4%, to $ 61.99 upon settlement, recording the largest weekly loss in two years.
Brent crude fell during the Friday session to $ 64.03 and US West Texas Intermediate crude to $ 60.45, the lowest level in four years.
“For me, this is likely to be close to the fair value of crude until we get an indicator on the amount of decrease in demand.”
“My opinion is that we will likely end up at about $ 55 or close to $ 60 in the near term of West Texas Intermediate crude, in a very violent way,” she added. He warned that demand will suffer under the current market conditions.
Jerome Powell, the head of the Federal Reserve (US Central Bank), said on Friday that the new Trump fees are “greater than expected” and economic repercussions are likely to include higher inflation and lower growth.
OPEC Plus plans
He contributed to pushing oil prices to drop the decision of the OPEC Plus coalition to stop the voluntary reduction plan for production, which means a significant increase in the supply.
Over the past few months, Saudi Arabia has been pressuring Kazakhstan and Iraq to improve their commitment to reduce production and threatened to start increasing its oil production if this did not happen.
But Kazakhstan has recorded standard production rates month after another, with the expansion of the American Chevron and Exxon Mobil in their production in the country’s main field. Iraq also took slow steps to reduce
Its production.
In a warning to uncomplicated countries, the OPEC Plus coalition decided last month to start increasing monthly production by about 130 thousand barrels per day, starting this April, in contrast to the market expectations to keep production rates unchanged.
However, with the increase in lack of commitment during the past month, Saudi Arabia surprised everyone and pressed the OPEC Plus coalition to increase production by 411 thousand barrels per day in May, which increases by three examples on the expected and represents about 0.4% of global supplies.
