Oil prices were marginally up today but remained near four-year lows amid recession fears following escalating trade tension between the US and China. Brent Crude was trading nearly flat at 64 dollars and 24 cents per barrel. WTI Crude was also trading slightly up by 0.15 per cent at 60 dollars and 79 cents per barrel when reports last came in.
The recent rebound in oil prices may not hold, and deeper declines could be ahead if geopolitical tensions worsen, according to Peter McGuire, CEO of Trading.com.
Brent crude rose toward $65 a barrel earlier on April 8 after hitting a four-year low in the previous session. West Texas Intermediate briefly traded above $61.
But McGuire believes this bounce is temporary. “Many are calling $45 could be the handle. But I’m not prepared to go that low. I still think it’s got a mid-50 handle,” he said, pointing to the possibility of oil slipping to around $56 or even lower if the US-China trade.
Crude has already lost 15% in just a week, and McGuire warned that markets are yet to fully price in the risks from the trade war. “Since Sunday night, Sydney time, it was electric,” he said, describing the volatility in energy futures as extreme and unpredictable.