ByCharles Kennedy– Apr 14, 2025, 10:30 AM CDT
Last week’s price crash, which saw Brent Crude prices dip below $60 per barre, was an excessive market reaction to the U.S. tariffs, with speculators assuming there would be no growth in oil demand due to recession fears, Gunvor’s head of research Frederic Lasserre told Bloomberg.
“I think the market overreacted,” Lasserre told Bloomberg in an interview, commenting on last week’s market rout.
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“I think this was a bit too aggressive, at least for now, and from here I see a bit more upside than downside because I feel there is a better exit than the zero-growth situation,” the research expert added.
Last Wednesday, Brent Crude prices fell briefly below the $60 per barrel mark for the first time in four years, during the worst of last week’s market turmoil when the oil and equity markets were already pricing in a global recession with zero oil demand growth.
Later on the same day, April 9, U.S. President Donald Trump announced a 90-day pause on tariffs on all countries except China, levies on which have since reached a triple-digit percentage.
The pause triggered relief rallies in crude and equity markets, but oil prices continued to be weighed down by the U.S.-China trade war escalation.
On Monday morning, oil prices were recovering and traded up by about 1.5% following the weekend U.S. announcement that some electronics, including smartphones, would be exempted from the tariffs on China. Brent Crude prices traded at about $65 per barrel, while the U.S. benchmark, WTI Crude, was at just above $62 a barrel.
The U.S. is preparing some kind of “semiconductor tariff”, it emerged on Monday amid the continued chaos of who and what is now being taxed additionally by the United States.
If the U.S. oil, WTI, remains close to the $60 a barrel level, shale production is unlikely to grow next year, Gunvor’s Lasserre told Bloomberg, but added that U.S. conventional oilfields would continue to increase production.
By Charles Kennedy for Oilprice.com
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