(Bloomberg) — Oil slid as signs of economic weakness in the world’s two biggest crude consumers fanned concerns that US tariffs will sap global energy demand.
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West Texas Intermediate dipped to trade below $67 a barrel, down more than 15% from its mid-January peak. US equities tumbled sharply on Monday and have erased all of their gains since Donald Trump was elected president as his trade actions threaten economic growth. Meanwhile, China’s consumer inflation fell more than expected and was below zero for the first time in 13 months.
Crude has been hit by a confluence of bearish factors, including the escalating global trade war, plans by OPEC and allies to increase production and talks to end the three-year war in Ukraine. That’s spurred speculators to cut net-bullish bets on global benchmark Brent by the most since July, although they also slashed bearish wagers against US crude.
In the US, Trump told Fox News the economy faces a “period of transition” after his actions on tariffs, while avoiding projections of a recession. On Friday, Federal Reserve Chair Jerome Powell acknowledged the rise in uncertainty, but said officials didn’t need to rush to cut rates.
Carlyle Group Inc.’s Jeff Currie wrote in a research note Monday that the trade in fossil fuels across borders peaked in 2017 and is set to decline as nations seeking energy security ramp up investments in renewable sources of energy.
Over the next week, traders will get plenty of market insights from the CERAWeek conference in Houston, which started Monday. Among speakers scheduled on the opening day are the chief executive officers of Exxon Mobil Corp., Saudi Aramco, Chevron Corp. and Vitol Group.
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–With assistance from Alex Longley.
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