Oil slumps 6% after OPEC+ May production hike announcement
Global oil prices tumbled 6% on Thursday on track for the third loss in a row, with US crude plumbing two-week lows, while Brent hit three-week lows after OPEC+ production hike announcement.
Prices are also pressured by renewed concerns about global fuel demand following Trump’s tariffs, and following a surprise increase in US crude stocks last week.
Prices
US crude fell 6% today to $66.41 a barrel, the lowest since March 19, with a session-high at $70.69.
Brent fell 5% to $69.82 a barrel, the lowest since March 13, with a session-high at $73.36.
On Wednesday, US crude lost 0.6%, while Brent slipped 1.5% on profit-taking away from six-week highs on risk aversion due to Trump’s aggressive tariffs.
OPEC+
OPEC+ officially announced a production hike by more than expected in May, due to improving market indicators and higher crude demand.
The alliance said it’ll enact a production hike equivalent to three months of scheduled increases, surpassing previous expectations of a cut focused on May alone.
Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman convened virtually to discuss global market conditions, with the group agreeing on raising output by 411 thousand bpd, sharply above estimates of a 140 thousand bpd hike.
US Tariffs
US President Donald Trump announced new historic reciprocal tariffs on many countries, that start with a base 10% and rise by many folds depending on the country.
He described the new tariffs as “a declaration of independence” and today as the “liberation day”.
Traders fear that the tariffs might tank global growth and hurt demand on fuel and other oil products.
US Stocks
The Energy Information Administration reported a buildup of 6.2 million barrels in US crude stocks last week to 439.8 million barrels, while analysts expected a drop of 0.7 million barrels.
Gasoline stocks fell by 1.6 million barrels to 237.6 million barrels, as distillate stocks rose by 0.3 million barrels to 114.6 million barrels.
Dow Jones tumbles over 1500 points, NASDAQ swoons 5%
US stock indices tumbled on Thursday amid aggressive selling pressures and correctional moves after President Donald Trump’s reciprocal tariffs.
Earlier US data showed unemployment claims fell by 6 thousand to 219 thousand last week, while analysts expected a rise to 227 thousand.
US President Donald Trump announced new historic reciprocal tariffs on many countries, that start with a base 10% and rise by many folds depending on the country.
He described the new tariffs as “a declaration of independence” and today as the “liberation day”.
He accused the world of “looting, pillaging, and raping the US for many years” on the economic trade fronts, with barriers being put in front of US companies worldwide.
Trump said the new tariffs are pivotal to bring back wealth to the United States, and he believes the 1929 Great Depression wouldn’t have happened if tariffs were kept.
He called NAFTA one of the worst trade deals ever, and said a single Chinese shipping yard produces more than the entire US production of ships.
He imposed 34% additional tariffs on China, 24% on Japan, 20% on the EU, 46% on Vietnam, 26% on India, 32% on Taiwan, 10% on the UK.
On trading, Dow Jones fell 3.6% as of 14:31 GMT, or 1515 points to 40,710 points, while S&P 500 fell 3.9%, or 222 points to 5448 points, as NASDAQ gave up 5.3%, or 928 points to 16675 points.
US dollar deepens losses to six-month nadir on Trump tariffs
The US dollar tumbled in European trade on Thursday against a basket of major rivals, sharpening losses for a second day and hitting a six-month trough after Trump imposed aggressive reciprocal tariffs on the world.
The tariffs raised concerns about a US recession, which could prompt the Federal Reserve to accelerate its plans of rate cuts this year.
The Index
The dollar index fell 2.2% today to 101.37, the lowest since October 2024, with a session-high at 103.69.
On Wednesday, the index lost 0.5%, the first loss in three days as US yields declined.
US Tariffs
US President Donald Trump announced new historic reciprocal tariffs on many countries, that start with a base 10% and rise by many folds depending on the country.
He described the new tariffs as “a declaration of independence” and today as the “liberation day”.
He accused the world of “looting, pillaging, and raping the US for many years” on the economic trade fronts, with barriers being put in front of US companies worldwide.
US Yields
US 10-year treasury yields fell by 2.1% today on track for the fifth loss in a row, plumbing a six-month low at 4.051%.
It comes as investors brace for slower US growth, which could force the Fed to enact more interest rate cuts this year.
Gold hits fresh record high after Liberation Day tariffs
Gold prices rose in European trade on Thursday on track for the second profit in a row, hitting a record high and approaching $3200 for the first time ever.
It comes amid strong haven demand amid surging trade tensions following US President Donnald Trump’s new reciprocal tariffs announced yesterday.
The markets were shaken by the far more aggressive than expected US tariffs announced against China, Japan, and the EU and many other countries.
Prices
Gold prices rose 1.1% to $3167 an ounce, a record high, with a session-low at $3122.
On Sunday, gold rose 0.65% on Wednesday, the fourth profit in five days as both the dollar and US yields fell.
US Tariffs
US President Donald Trump announced new historic reciprocal tariffs on many countries, that start with a base 10% and rise by many folds depending on the country.
He described the new tariffs as “a declaration of independence” and today as the “liberation day”.
He accused the world of “looting, pillaging, and raping the US for many years” on the economic trade fronts, with barriers being put in front of US companies worldwide.
The new tariffs will stack on top of the 25% auto tariffs already announced a few days ago and will go into effect this week.
SPDR
Gold holdings at the SPDR Gold Trust rose 0.57 tons on Wednesday to a total of 931.94 tons.