Oil Crashes To $60 Per Barrel As Global Recession Fears Grow

Last week, the price of WTI crude oil recorded its largest weekly loss in two years after President Donald Trump announced a tougher-than-anticipated set of tariffs, prompting swift retaliation from China, the world's largest importer of oil.

WTI futures fell further on Monday to just above $60 per barrel, the lowest level since April 2021, as concerns that the escalating trade war could slow the global economy and weaken energy demand.

Economists at Goldman Sachs published a note on Sunday night raising their recession probability forecast from 35% to 45%, citing the sharp tightening of financial conditions and a spike in policy uncertainty.

Energy analysts at Goldman Sachs followed by further reducing their year-end oil forecasts to $62 per barrel for Brent and $58 for WTI, with additional downside expected in 2026. The analysts noted recent GDP downgrades and forecasts of a "stagnating" U.S. economy.

Adding to the pressure on oil prices, last week, eight OPEC+ oil producers announced nearly triple the expected production increase to 411,000 barrels per day versus the anticipated increase of just under 140,000 barrels per day next month.

At $60 per barrel for WTI crude, prices have fallen below the $65 threshold identified by the Federal Reserve Bank of Dallas as the break-even point for Permian Basin operators like Chevron Corp. CVX and Exxon Mobil Corp. XOM.

However, Energy Secretary Chris Wright recently said that the U.S. shale sector is capable of ramping up oil production even if prices fall to $50 per barrel.

In the Federal Reserve Bank of Dallas' most recent quarterly survey, leaders in the oil and gas industry expressed frustration with the Trump administration.

"The administration's chaos is a disaster for the commodity markets. ‘Drill, baby, drill' is nothing short of a myth and populist rallying cry. Tariff policy is impossible for us to predict and doesn't have a clear goal. We want more stability," one exploration and production executive said.

Shares of the United States Oil Fund USO ETF, which tracks the spot price of WTI crude oil, were down nearly 15% over the past week. At the time of publication on Monday, WTI crude was trading at $60.90 per barrel.

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