Crude oil prices hit 4-year low: Here we decode why
What's the story
Crude oil prices have fallen to their lowest level since early 2021, largely due to the intensifying trade war between the US and China.
The latest crash was caused by US President Donald Trump's announcement of a 104% tariff on China. This has sparked fears of a global economic recession, which could cut down oil demand.
Today, Brent futures fell $1.39 or 2.21%, to $61.43 a barrel, while US West Texas Intermediate crude futures plunged by $1.50 (2.52%) to $58.08.
Supply concerns
OPEC's output increase puts pressure on oil prices
Adding to the downward pressure on oil prices is the decision by OPEC+ to increase output in May by 411,000 barrels per day.
The move has led analysts to predict a potential market surplus.
Goldman Sachs now believes that Brent and WTI might fall to $62 and $58 per barrel by December 2025, and further down to $55 and $51 per barrel by December 2026.
Inventory data
US inventories show positive demand sign
Despite the overall negative trend in oil prices, there was a slight positive sign for demand as US crude inventories fell by 1.1 million barrels in the week ended April 4.
The figure was lower than the expected rise of about 1.4 million barrels as per a Reuters poll.
Official inventory data from the Energy Information Administration is expected to be released later today at 10:30am EDT (8:00pm IST).