American Crude Rings Recession Bells
Investors feared the president's foreign tariffs could push the U.S. economy into a recession and possibly impact the global market.
US oil prices fell about 2 percent on Monday, adding to the steep declines from last week. Investors feared the president’s foreign tariffs could push the U.S. economy into a recession and possibly impact the global market.
The West Texas Intermediate crude futures fell to $58.95 per barrel, the lowest since 2021. This latest price movement follows last week’s closing losses of over 10 percent for U.S. crude and Brent.
There has been downward pressure on oil prices following the decision last week by major OPEC+ producers to accelerate production increases,
The price of Saudi Aramco’s flagship Arab Light crude oil was reduced on Sunday. Early on Monday, Trump praised the significant drop in oil prices. In a post on Truth Social, the president stated that the long-abused USA is bringing in billions of dollars a week from the abusing countries with tariffs already in place.
“Food prices are down, oil prices are down, interest rates are down (the slow-moving Fed should cut rates!), there is no inflation.” However, there is growing concern that tariffs might lead to higher business costs, which could slow down the economy and, in turn, reduce oil demand.
As the tariffs take effect this week, JPMorgan warns they will “likely push the U.S. and possibly the global economy into harm’s way.”
Bank of America predicts that this year, as OPEC+ boosts production, the trade war will cut the growth in oil demand in half.
Analysts at Bank of America, led by Kalei Akamine, wrote a note to clients on Monday, saying, “We believe oil prices and oil-levered equity values have more room to fall if this scenario plays out.” Goldman Sachs lowered its oil price forecast for December 2025 by $4 to $58 per barrel for US crude and $62 per barrel for Brent on Sunday.
According to the investment bank, prices will continue to decline in 2026, with Brent and US crude averaging $55 and $58 per barrel, respectively.
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