Oil slumps to $60 a gallon as recession fears – Business News
US oil costs sank under $60 a gallon on Monday as fears worsened that President Donald Trump’s stiff tariffs might push the US into a recession – and analysts warned of a potential “eye-watering” surplus.
Futures tied to US West Texas intermediate crude fell as low as $58.95 per barrel, reaching back up to $60.63 by about 1 p.m. ET. Global benchmark Brent fell as low as $62.51, ticking back up to $64.40 by Monday afternoon.
The benchmarks hit their lowest ranges since 2021 as traders apprehensive the inflationary dangers of the taxes and OPEC’s current shock provide hike might spark a surplus.
US oil costs sank under $60 a gallon as fears worsened that President Donald Trump’s tariffs might reheat inflation and trigger a recession. Getty Images
Trump, nevertheless, celebrated the decrease costs in a Monday morning post on Truth Social, his social media platform.
“Oil prices are down, interest rates are down (the slow moving Fed should cut rates!), food prices are down, there is NO INFLATION, and the long time abused USA is bringing in Billions of Dollars a week from the abusing countries on Tariffs that are already in place,” the president wrote.
If low oil costs stick round, although, American frackers might be compelled to re-evaluate their spending ranges and can seemingly gradual their drilling – placing Trump’s “drill, baby, drill” agenda at risk.
The White House didn’t instantly reply to The Post’s request for remark.
Bank of America forecast the worldwide commerce conflict – which has heated up as China and the European Union threaten retaliation – will cut oil demand growth in half this yr to 450,000 barrels per day.
That demand stoop might lead to an “eye-watering” surplus of 1.25 million barrels per day, they added.
“The risks introduced by President Trump’s tariffs and OPEC’s acceleration amplified the surplus we already saw forming,” analysts led by Kalei Akamine advised purchasers in a be aware on Monday.
President Donald Trump final week unveiled his plan for so-called “reciprocal” tariffs. Getty Images
“We believe valuations will continue to fall, paced by the broader market,” the analysts continued.
Lower oil costs coincided with a notably unstable trading session on Monday, as investor sentiment continues to take a flip for the more serious after Wall Street suffered its worst week for the reason that COVID-19 pandemic.
Major banks like JPMorgan and Goldman Sachs hiked their odds of a recession to 60% and 45%, respectively, after final week’s huge two-day rout, deepening tariff-related anxiousness.
Lower oil demand due to the world commerce conflict might lead to an “eye-watering surplus,” in accordance to Bank of America analysts. Bloomberg by way of Getty Images
Goldman Sachs on Sunday lowered its price forecast for US crude oil by $4 to $58 per barrel in December, and to $62 for Brent.
The bank projected that costs will proceed to fall in 2026, with US crude and Brent averaging $55 and $58 per barrel all year long, respectively.
