Oil suffers biggest 5-day drop since 2022, metals plunge as trade war escalates

SINGAPORE: 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 US is set to intensify.

Stocks in Asia extended a slide on Wall Street as US President Donald Trump looked set to press ahead with whopping 104 per cent 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 per cent 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 US 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 LCOc1 was at $61.4 a barrel, while West Texas Intermediate Futures were at $58.16 CLc1 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 3.0 per cent amid heightened fears of a global recession. Benchmark copper CMCU3 on the London Metal Exchange fell 1.0 per cent, 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 per cent tariffs on all US goods from April 10, after Trump imposed a 34 per cent tariff on most Chinese goods as part of his higher tariffs.