Oil Prices Plummet Amid Economic Uncertainty
Global oil prices have plunged to their lowest levels since 2021, with Brent crude dropping to $68.33 per barrel on Wednesday. The latest decline marks a 5% drop since Monday, fueled by:
Concerns over the impact of Donald Trump’s trade war on the global economy.
Rising U.S. crude stockpiles, signaling weakening demand.
OPEC+’s decision to increase oil production despite economic slowdowns.
U.S. Economic Slowdown Hits Oil Demand
New economic data indicates sluggish growth, further pressuring oil markets:
U.S. crude stockpiles rose by 3.6 million barrels, reaching 433.8 million, exceeding analyst expectations.
ADP job report: The U.S. economy added only 77,000 jobs in February, far below the 140,000 expected.
Slow consumer spending is leading to corporate layoffs and cautious hiring.
Trump’s Tariffs Shake Global Markets
Amid rising fears of an economic downturn, President Donald Trump defended his sweeping tariffs on China, Canada, and Mexico:
💬 Trump’s statement to Congress: “Tariffs are about making America rich again and making America great again, and it is happening and it will happen rather quickly.”
However, economists warn that tariffs will:
⚠ Slow economic growth, reducing global oil demand.
⚠ Increase inflation, further weakening consumer spending.
OPEC+ Decision Adds to Oversupply Worries
OPEC+, led by Saudi Arabia and Russia, announced a 2.2 million barrels per day increase in oil production by 2026, despite demand concerns.
Analysts suggest this decision was influenced by geopolitical pressure from the U.S., with Trump urging oil producers to lower prices.
Oil Majors Shift Focus Back to Fossil Fuels
In response to Trump’s pro-oil policies, BP and Shell are:
✅ Scaling back green energy investments.
✅ Increasing oil and gas production.
Trump’s “drill, baby, drill” strategy aims to boost U.S. domestic production, with deregulation efforts expected to expand U.S. drilling activity.
Are We Near a Bottom for Oil Prices?
Energy traders believe oil prices may stabilize soon. Rebecca Babin, an energy trader at CIBC, said:
🔹 “At this point, the focus has completely shifted from supply risks to demand concerns, which could signal we’re approaching a bottom.”
Meanwhile, lower crude prices could bring relief to consumers, as gasoline and diesel prices are expected to decline in the coming weeks.
📉 UK petrol prices hit a six-month high in February but could fall if crude prices remain low.