Brent rebounds following sharp sell-off

The front-month ICE Brent contract has moved $1.29/bbl higher on the day, to trade at $64.35/bbl at 09.00 GMT.

CONCEPT: An oil pumpjack along with upward arrows to signify the price gain. Getty Images

Upward pressure:

Brent’s price rebounded from a multi-year low in a relief rally, supported by improved sentiment in equity markets after a sharp sell-off in the previous session, according to market analysts.

“Oil prices witnessed something of a relief rally this morning,” two analysts from ING Bank noted. “The scale of tariffs, combined with the decision from OPEC+, clearly took speculators by surprise. This is reflected in the ferocity of the sell-off in oil,” the analysts added.

While there are no significant upward pressures on Brent’s price at the moment, concerns over US sanctions on major oil producers such as Iran, Venezuela and Russia have helped prevent a further decline.

Downward pressure:

Brent futures felt significant downward pressure as fears of a global trade war added to the concerns of rising OPEC+ production.

US President Donald Trump-led administration have so far revealed no plans to reserve its decision to place tariffs on major trade partners.

Following China’s announcement to place 34% retaliatory tariffs on US goods, Trump threatened China with 50% additional tariffs starting 9 April.

“The prospects of weaker oil demand as a result of a costly trade war has spooked traders, with Brent crude down nearly 14% since Trump announced the tariffs,” ANZ Bank’s senior commodity strategist Daniel Hynes remarked.

The European Union (EU) may impose retaliatory tariffs of 25% on a range of US goods, some of which are set to take effect in mid-May, according to a Reuters report.

“Oil prices have had their worst week since October 2023, with risk assets getting hit by US President Donald Trump’s reciprocal tariffs and the retaliation we have started to see towards them,” ING Bank’s analysts added.

By Aparupa Mazumder

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