Oil prices have plummeted to their lowest levels in years, driven by concerns over the potential impact of President Trump’s trade policies on global energy demand. Brent crude fell to its lowest level since December 2021, while West Texas Intermediate approached lows last seen in May 2023. The price decline reflects growing anxieties that trade wars could significantly reduce energy consumption and disrupt established oil trade routes. The specifics and duration of these trade measures remain uncertain, adding to market volatility.
Adding to the downward pressure, OPEC+ nations are proceeding with a planned increase in oil production. This increase, coupled with a recent rise in US domestic crude stockpiles, has heightened expectations of a supply surplus. The confluence of weakened demand and increased supply has created a bearish outlook for the oil market. Options traders are exhibiting heightened bearish sentiment, with a surge in put contract volumes indicating expectations of further price declines.
