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.
Read Next: Trump Slaps 25% Tariffs On Autos: What It Means For Your Next Car Purchase
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. (NYSE:CVX) and Exxon Mobil Corp. (NYSE: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 (NYSE: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.
Read Next:
Image: Shutterstock
© 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
