On Thursday (3), future oil contracts have lost the accumulated gains in recent weeks, with the conception that the “mutual tariff” announced by President Donald Trump on Wednesday (2) was more aggressive than expected, which increased concerns about the slowdown in the global economy and the consequent decrease in demand for goods.
On the New York Mercantile (NYMEX), the WTI oil contract for May decreased by 6.64 % ($ 4.76), closed at $ 66.95 a barrel. Brent gave the month of June, which was negotiated at Exchange Incontinental (ICE), 6.42 % ($ 4.81), to reach $ 70.14.
In addition to the effects of escaping from the global risks from the announcement of the US tariff, energy investors considered increasing expectations in the production of oil and allies exports (OPEC+), on Thursday, in addition to a series of trade data, employment and economic activity in the United States.
“The American consumer is in a bad situation, and foreign manufacturers are in the same boat, which is negative to demand in an environment that has already faced difficulties,” says Scott Shelton of TP ICAP.
Brent prices are expected to remain between $ 70 and $ 80 a barrel, and Barclays Lydia Renford and PickAP analyst writes in a note.
Oil and gas imports are exempt from customs tariffs, but the recession concerns affected growth expectations.
Looking at the possibility of a decrease in demand, but still with a restricted offer, Brent prices should spend a longer time over $ 70 a barrel than this level, as they write.
Covid Five: How the epidemic continues to influence small companies
