Fasten Your Seatbelts

Energy prices plunged following President Trump’s tariff announcement, fueling investor uncertainty about a potential recession as global consumption is expected to decline due to higher retail prices.

Crude Oil

Crude Oil Futures Plummeted, Investors Prepare for a Hard Landing

• WTI crude oil futures dropped 7.4% to $62 per barrel, the lowest level since August 2021, amid mounting fears of a global economic slowdown and weakening oil demand.
• Investor sentiment has been increasingly rattled by the escalating trade war—particularly in response to China’s planned 34% tariff on U.S. goods.
• OPEC+ has accelerated plans to increase production by 411,000 barrels per day in May, adding to supply-side pressures.
• While the U.S. has granted tariff exemptions for energy products, the broader trade turmoil continues to weigh heavily on global markets.

Gasoline

Gasoline Prices Fell on Trade War’s Drums, Despite Uptick in Demand

• US gasoline futures fell below $2.06 per gallon in April, the lowest level in six weeks, tracking crude oil prices lower amid signs of oversupply and deepening concerns about weakening demand.
• Fears of a global trade war were stoked by President Trump’s sweeping new tariffs, raising concerns that slower economic growth could curb global fuel demand.
• On the domestic demand side, the start of the travel season has led to a surge in consumption, as reflected by a gradual rise in the national average price.
• This seasonal uptick in demand coincides with a marked decline in gasoline inventories—down roughly 530,000 barrels in the second week of March—while domestic production has also contracted, further tightening available supply.

Natural Gas

LNG Futures Lower on China’s Retaliatory Tariffs, but Sentiment Remains Mixed

• US natural gas futures fell below $3.90/MMBtu on Friday, down 1.6% for the week, as China’s new 34% tariffs on U.S. goods reignited fears of a global recession.
• The latest EIA report shows U.S. gas storage levels remain 4.3% below the seasonal average, despite three consecutive weeks of inventory injections.
• LNG exports reached a record 15.8 Bcf/d in March, while gas production peaked at 106.2 Bcf/d, though output has begun to decline in April.
• Weather forecasts project near-normal temperatures through mid-April, potentially moderating short-term heating and cooling demand.