Oil Prices Rebound 1% After Trump Tariff Shock; Recession Fears Linger

Oil Prices Rebound 1% After Trump Tariff Shock; Recession Fears Linger

Tokyo, April 8 — Oil prices rose around 1% on Tuesday morning, rebounding from a sharp plunge in the previous session as markets reacted to U.S. President Donald Trump's sweeping new tariff policy. While the recovery offers a brief relief, analysts warn that downside risks remain, particularly amid growing concerns of a global recession.

🔺 Oil Makes Modest Recovery
- Brent crude futures rose by 66 cents, or 1%, to $64.87 per barrel.
- U.S. West Texas Intermediate (WTI) gained 67 cents, or 1.1%, to $61.37 (as of 06:50 GMT).

On Monday, oil prices had slumped by 14–15% following Trump’s April 2 announcement of “reciprocal tariffs” on all U.S. imports, triggering panic across energy and financial markets.

📉 Demand Fears and Recession Risk
Warren Patterson, Head of Commodities Strategy at ING, said the market is beginning to price in a significant hit to energy demand.
“But the full extent of the impact is still unclear,” he added.

An ING note also highlighted continued downside risk — especially if Trump follows through on his threat to slap an additional 50% tariff on Chinese goods should Beijing fail to roll back its 34% retaliatory tariffs by April 8.

📉 China Holds Its Ground, Risk Escalates
Analysts at IG warned that if China refuses to back down, the total U.S. tariff rate on Chinese imports could soar to 104%, which may:
- Trigger a sharp selloff in global equity markets
- Undermine investor confidence
- Accelerate the pace of a global economic downturn

📊 Market Awaits Oil Inventory Data
A Reuters poll showed U.S. crude inventories likely rose by 1.6 million barrels last week, pointing to ongoing demand weakness.
Traders are now awaiting:
API inventory report (due Tuesday)
Official EIA data (due Wednesday)
to gauge near-term market direction and supply-demand dynamics.