The global oil market experienced a significant downturn in early trading on April 9, 2025, with prices reaching their lowest levels in more than four years.
Both WTI and Brent crude continue to face strong bearish pressure amid escalating US-China trade tensions and growing recession fears.As of the morning of April 9, 2025:WTI crude is trading at approximately $57.22 per barrel, down 3.9%Brent crude has fallen to $60.36-$60.69 per barrel, down about 3.92%Both benchmarks have hit their lowest levels since early 2021Previous Day Market Recap (April 8, 2025)Yesterdays session saw continued downward pressure with:Brent futures settling down $1.39 (2.16%) at $62.82 per barrelWTI crude futures closing down $1.12 (1.85%) at $59.58 per barrelOil benchmarks have now slumped by approximately 16% since President Trumps April 2 tariff announcementGlobal Oil Rout: WTI Crashes to $57, Brent Slides Under $61 as Markets Tumble.
(Photo Internet reproduction)Overnight DevelopmentsThe sell-off accelerated during Asian trading hours as the US officially implemented its threatened tariffs:Oil slid deeper below the critical $60 level in early Wednesday tradingBoth WTI and Brent continued their downward trajectory, reaching multi-year lowsMarket volatility increased as traders assessed the full impact of new trade measuresKey Market DriversUS-China Trade War EscalationThe primary catalyst for the current sell-off is the implementation of punitive tariffs between the worlds two largest economies:The US has imposed 104% tariffs on Chinese goods effective 12:01 a.m.
EDT on April 9President Trump threatened an additional 50% tariff if China doesnt rescind its 34% retaliatory measuresBeijing has vowed to fight to the end rather than yield to what it terms US blackmailRecession Fears IntensifyWall Street is increasingly concerned about economic contraction:Goldman Sachs has projected a 45% likelihood of a US recession within the next yearJPMorgan indicated a 60% chance of recession both in the US and globallyTreasury Secretary Scott Bessent claimed China is in a disadvantageous position in the trade conflictOPEC+ Supply IncreaseAdding to downward price pressure:OPEC+ decided last week to increase output by 411,000 barrels per day in MayThis represents a significant acceleration from previously scheduled increases of 135,000 bpdSaudi Arabia announced substantial reductions in crude oil prices for Asian consumers, bringing May prices to a four-month lowTechnical AnalysisWTI crude has broken through critical support levels:The long-term support zone between $60.00 and $65.00 that had held since mid-2021 has been breachedCurrently in a downward impulse wave 3, part of the intermediate impulse wave (3) from early 2024The next key support level to watch is $55.00, which analysts identify as the target price for the completion of the active impulse waveBoth 100-period and 200-period moving averages are trending downward above current price levels, suggesting the longer-term bearish bias remains intactInventory DataIn a somewhat contrarian development:American Petroleum Institute data revealed that US crude inventories decreased by 1.1 million barrels for the week ending April 4This contrasts with earlier expectations of an increase of approximately 1.4 million barrelsHowever, this bullish data point has been overwhelmed by macroeconomic concernsPrice ForecastsMajor financial institutions have revised their outlooks downward:Goldman Sachs now projects Brent and WTI crude prices could fall to $62 and $58 per barrel respectively by the end of 2025In a recession scenario, prices could potentially drop to the $50 range by year-endCiti analysts expect a floor of $60 for Brent, noting that the US Administration likely wants to safeguard the viability of the US shale industryGlobal Market ImpactThe bearish sentiment is affecting oil markets worldwide:Russias ESPO Blend oil price dropped below the $60 per barrel Western price cap for the first time on MondayCrude imports in Asia showed signs of decline in the first quarter according to LSEG Oil Research dataChinas status as the worlds largest crude importer makes its economic outlook particularly significant for global oil demandExpert CommentaryMarket makers have offered these insights:Lin, president of commodity markets at Rystad Energy: If the trade conflict persists, Chinas anticipated oil demand growth of 50,000 to 100,000 barrels per day could be jeopardized, although a robust stimulus aimed at boosting domestic consumption might help alleviate the impactHarry Tchilinguirian from Onyx Capital Group: The uncertainty surrounding tariff regulations remains very pronounced.
Several major Wall Street banks are revising down economic forecasts and indicating a significant increase in recession probabilities.
This sentiment is what is influencing market behaviorSugandha Sachdeva, founder of SS WealthStreet: This potential surge [in OPEC+ output], reversing maintained over past two, signifies a major shift in market dynamics and poses a considerable challenge for pricesOutlookThe oil market faces continued pressure from what one analyst called a toxic cocktail of recession fears and increased OPEC+ production.Traders will be closely watching for any signs of de-escalation in the trade war or OPEC+ production adjustments that could provide price support.
The upcoming EIA inventory report will also be crucial in determining near-term price direction.