TOKYO – Oil prices rose more than 1 percent on Tuesday, rebounding after a hefty selloff in recent sessions led by concerns that US tariffs might depress demand and lead to a global recession.
Brent futures LCOc1 were up 81 cents, or 1.26 percent, at $65.02 per barrel, while US West Texas Intermediate crude futures CLc1 rose 92 cents, or 1.52 percent, to $61.61.
On Monday, oil prices slid 2 percent, nearing a four-year low, due to fears that US President Donald Trump’s latest trade tariffs could thrust global economies into recession and diminish energy demand. Markets, however, anticipate a potential limit to the downward trajectory of oil prices.
Trump maintains that the tariffs – a minimum of 10 percent for all US imports, with targeted rates of up to 50 percent – would facilitate the revival of the US industrial base which he says has been declining due to decades of trade liberalization.
While many countries are seeking an exemption or at least reduction in the tariffs, some, including China, the world’s second-largest economy after the US, have announced plans for reciprocal tariffs. Trump said he would impose even more tariffs on China if Beijing does not withdraw its countermeasures.
“Should China stand firm, the total tariff rate on its imports to the US would climb to an astonishing 104 percent, a move likely to trigger a further souring of risk sentiment, steep drops in global stock markets and accelerate the pace of the global economy’s descent into recession,” Tony Sycamore, market analyst with IG, said in a note.
