Oil prices remained under pressure at the start of the new trading week. Brent fell at times by more than 5% to $62.5 per barrel, the lowest level in four years, Commerzbank's commodity analyst Barbara Lambrecht notes.

Brent and WTI hit four-year lows

"WTI slipped to $59 per barrel. Gasoil fell below $600 per ton for the first time since the end of 2021. Since Trump announced the tariffs, oil prices have fallen by more than 16% at their lowest point. The main negative factor is concerns about a global recession triggered by the trade war, which would lead to a significant slowdown in oil demand."

"In China in particular, oil consumption could be even weaker due to the exceptionally high tariffs. Negative effects on oil demand are also expected in the US due to the anticipated countermeasures by other countries and higher inflation as a result of tariffs, even if the fall in oil prices could lead to lower gasoline prices and thus provide some relief."

"Saudi Arabia lowered its official selling prices for customers in Asia by $2.3 per barrel in May compared to the Oman/Dubai benchmark, the largest reduction in more than two years. This also points to weaker oil demand. After all, the significantly higher production levels from May onwards can apparently only be sold at more substantial discounts. Market participants surveyed by Reuters before the announcement of the production increase had expected a smaller price reduction."

Source: Fxstreet