U.S. Unemployment: According to the Labor Department's report released on Friday, the unemployment rate for March 2025 edged up to 4.2%, above the anticipated 4.1%, as the labor force participation rate also saw an increase. Job growth exceeded expectations in March, offering at least temporary reassurance regarding the stability of the labor market, while the report is set against an uncertain economic backdrop following President Donald Trump’s recent tariff announcements which have heightened concerns of a potential global trade war and its impact on economic growth. Nonfarm payrolls rose by 228,000 during the month, surpassing the increase of 117,000in February and exceeding the Dow Jones estimate of 140,000.
U.S. Oil Rigs: The number of oil and natural gas rigs fell by two to 590, oil rigs rose by five to 489 last week, their highest since June, while gas rigs fell by seven, the most in a week since May 2023. According to the latest data from the EIA, weekly crude oil production in the U.S. experienced a modest increase, just 51,000 bpd short of the all-time high recorded during the week of December 6, 2024.
China’s Tariff Retaliation: Oil plummeted to its lowest level in several years on Friday, following China's imposition of tariffs, marking the lowest point since 2021. Copper, soybeans, and other commodities also declined as China retaliated against the U.S.'s aggressive tariff actions. The escalating tensions have heightened concerns that the tariffs could trigger a global trade war, potentially dampening economic growth and reducing demand for key commodities. While the U.S. tariffs did not target energy products, China's retaliatory measures affect all U.S. goods, including export restrictions on certain rare earth elements. The U.S. remains a significant energy exporter, with oil and natural gas being major exports to China.
Market Overview: WTI crude oil futures declined by another 3%, marking its lowest point since April 2021. This drop comes amid growing concerns that the intensifying trade war may dampen global economic growth and reduce energy demand. Last week, WTI experienced its largest weekly loss in two years following U.S. President Donald Trump's announcement of significant new tariffs, which prompted immediate retaliatory measures from major trading partners. While the downside risk remains significant, it’s also important to watch for any shifts in global supply-demand fundamentals or policy responses that might stabilize or reverse the trend.
WTI Chart – Daily
U.S. oil prices have dropped below $60 a barrel in overnight trading on fears global tariffs would push the U.S. into a recession. The decision by OPEC+ producers last week to increase the pace of production hikes has also put downward pressure on oil prices. Thursday and Friday of last week, WTI crude oil futures experienced significant losses, with prices plummeting to near multi-year lows, dropping to a low of $60.45 per barrel. Brent crude futures also experienced a significant drop, falling roughly 7% to hover around $64. Factors contributing to the decline include trade war concerns (tariff announcements), increased oil production (oil-producing countries have accelerated plans to increase output) and demand fears (potential global recession and reduced demand for oil) are all adding further downward pressure on prices. The current Relative Strength Index (RSI – see black circle on chart) for WTI has decreased to 27.35. When the RSI falls below 30, it is typically seen as an indication that the asset is oversold, potentially signaling a reversal or buying opportunity.
In today’s oil markets, WTI crude oil prices closed with another decline, though not nearly as significant as the end of last week, Thursday and Friday. However, the trading range for WTI crude oil today was notably broad, with prices reaching a low of $58.95 during overnight and early morning trading, then rebounded, peaking at $63.90 before ultimately settling at $60.70 per barrel by the close of the session. This marks the lowest closing price since April 2021. The recent sharp drops have been primarily attributed to escalating U.S. China trade tensions, which have heightened fears of a global recession and dampened oil demand. Additionally, announcements of new tariffs have contributed to market volatility, further exacerbating concerns about economic growth and oil consumption. These developments have led to a challenging environment for U.S. oil producers, who require prices higher than $60.00 to maintain profitability.
