Oil prices fell to a four-year low on Wednesday in its worst five-day losing streak in three years, while several commodities, including base metals, tumbled as the trade war between China and the U.S. is set to intensify.
Stocks in Asia extended a slide on Wall Street as U.S. President Donald Trump looked set to press ahead with whopping 104% duties on Chinese goods as global recession fears gripped financial markets.
“Crude oil extended losses amid signs of escalation in the trade war,” ANZ said in a note. “Copper has lost nearly 10% since Trump announced his reciprocal tariffs on major trading partners.”
The United States said on Tuesday that the higher tariffs on imports from China will take effect shortly after midnight, even as the Trump administration moved to quickly start talks with other trading partners targeted by sweeping tariffs.
Oil prices dropped to their lowest in more than four years on looming demand concerns fuelled by the tariffs war between the U.S. and China, the world’s two biggest economies, and a rising supply outlook.
“China’s aggressive retaliation diminishes the chances of a quick deal between the world’s two biggest economies, triggering mounting fears of economic recession across the globe,” said Ye Lin, vice president of oil commodity markets at Rystad Energy.
China’s expected oil demand growth of up to 100,000 barrels per day “is at risk if the trade war continues for longer, however, a stronger stimulus to boost domestic consumption could mitigate the losses,” she said.
Brent crude was at $61.40 a barrel, while West Texas Intermediate Futures were at $58.16.
Oil has lost about one-fifth of its value since Trump announced higher tariffs on its trading partners on April 2, the biggest five-day drop since March 2022.
COPPER, IRON ORE AND VEGOILS
Base metal prices in China fell, with copper futures on the Shanghai Futures Exchange hitting an eight-month low and iron ore on the Dalian Commodity Exchange sliding 3% amid heightened fears of a global recession.
Benchmark copper on the London Metal Exchange fell 1%, down for a fifth day and its biggest five-day losing streak since March 2020.
China is the world’s biggest metals consumer. The country retaliated last Friday with additional 34% tariffs on all U.S. goods from April 10, after Trump imposed a 34% tariff on most Chinese goods as part of his higher tariffs.
Malaysian palm oil futures lost more than 1% while rubber tumbled to a more than one-year low.
However, some markets bucked the wider trend. Gold prices climbed nearly 2% as the dollar weakened following the implementation of Trump’s tariffs on China, prompting many traders to seek refuge in safe-haven bullion.
Chicago soybeans rose for a third session, rebounding from four-month lows hit earlier in the week, aided by rising prices in Brazil and a softer dollar.
(Reporting by Naveen Thukral; additional reporting by Michele Pek; Editing by Christian Schmollinger)