UPDATE 11-Oil settles down $1 to trade at four-year lows as US-China trade war escalates

08/04/2025, 21:49:11.5860000

Associated keywords:

• SNEX.O
• CLc1
• LCOc1
• GS.N

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Oil prices settle down more than $1 a barrel


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Downside risks remain as US, China escalate tariff
conflict


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Goldman Sachs says Brent, WTI could hit $62 and $58,
respectively, by December 2025


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Trump says US and Iran will hold nuclear talks in Oman



(Updates with U.S. oil stocks data from API in paragraphs
16,17)
By Georgina McCartney
HOUSTON, April 8 (Reuters) - Oil prices settled down
more than $1 a barrel on Tuesday to trade at four-year lows, as
recession fears exacerbated by the trade conflict between the
U.S. and China, the world's two biggest economies weighed on
investor sentiment.
Brent futures LCOc1 settled down $1.39, or 2.16%, at
$62.82 a barrel. U.S. West Texas Intermediate crude futures
CLc1 settled down $1.12, or 1.85%, to $59.58.
The two benchmarks had slumped by 14% and 15%, respectively,
on Monday after U.S. President Donald Trump's April 2
announcement of "reciprocal tariffs" on all U.S. imports.
The U.S. will impose a 104% tariff on China from 12:01 a.m.
EDT on Wednesday, a White House official said after Beijing did
not lift its retaliatory tariffs on U.S. goods by a noon
deadline on Tuesday set by Trump.
The unfolding trade conflict helped drive Brent futures
down more than $2 a barrel during the session and U.S. crude
futures down $2 in post-settlement trade, as U.S.
stock indexes
also broadly sank.

On Tuesday, Beijing vowed not to bow to what it called
U.S. "blackmail" after Trump threatened an additional 50% tariff
on Chinese goods if the country did not lift its 34% retaliatory
tariff.
China's Commerce Ministry said the country "will fight to
the end," ratcheting up fears about a contraction of the global
economy.
"The scenario has presented a case for a global recession,
where fears of energy demand declining have emerged," Alex
Hodes, director of market strategy at financial services firm
StoneX, said in a note.
U.S. Trade Representative Jamieson Greer told U.S. senators
on Tuesday that China has not indicated it wants to work toward
trade reciprocity.
Goldman Sachs forecast that Brent and WTI crude prices would
be at $62 and $58 a barrel, respectively, by December 2025, and
at $55 and $51, respectively, a year after that, under different
scenarios.
The U.S. administration has indicated a strong preference
for reducing crude prices to $50 or lower, considering this goal
a top priority among its objectives, according to Natasha
Kaneva, head of global commodities strategy at J.P. Morgan.
"This includes being willing to endure a period of industry
disruption similar to the one experienced by the shale sector
during the 2014 price war between OPEC and shale, if it
ultimately results in lower cost of oil production," Kaneva
said.

IRAN TALKS
On Monday, Trump also made a surprise announcement that the
U.S. and Iran were set to begin direct talks on Tehran's nuclear
program, but Iran's foreign minister said the discussions would
be indirect.
U.S. Energy Secretary Chris Wright said on Tuesday that Iran
can expect tighter sanctions if it does not come to an agreement
with Trump on its nuclear program.
"So absolutely, I would expect very tight sanctions on Iran,
and hopefully drive them to abandon their nuclear program,"
Wright said in an interview on CNBC.
Meanwhile, U.S. crude oil and distillate
inventories fell
while gasoline stocks rose last week, market sources said,
citing American Petroleum Institute figures on Tuesday.

Crude stocks fell by 1.1 million barrels in the week
ended April 4, the sources said on condition of anonymity.
Gasoline inventories rose by 210,000 barrels and distillate
stocks fell by 1.8 million barrels, they said.

Official weekly oil inventory data from the Energy
Information Administration is due on Wednesday.

(Reporting by Georgina McCartney in Houston, Ahmad Ghaddar in
London; Additional reporting by Katya Golubkova in Tokyo and
Emily Chow in Singapore; Editing by David Goodman, Andrea Ricci,
Richard Chang, Paul Simao, Deepa Babington and David Gregorio)
((mailto:Georgina.McCartney@tr.com))

RTRS