Trump tariff threat pushes oil to five-month low

Core Viewpoint - The recent decline in Brent and U.S. crude futures is attributed to U.S. President Trump's threat to impose increased tariffs on China, which has raised concerns over demand in an already oversupplied market [1][2]. Group 1: Market Reaction - Brent crude futures settled at $62.73 a barrel, down $2.49, or 3.82%, marking the lowest price since May 5 [2]. - U.S. West Texas Intermediate crude finished at $58.90 a barrel, down $2.61, or 4.24%, also the lowest since early May [2]. - The sell-off was characterized as a shift to risk-off markets due to Trump's tariff threats [1]. Group 2: Contributing Factors - The decline in oil prices is compounded by production increases from OPEC and additional output gains in North and South America [3]. - The geopolitical risk has diminished following the Gaza ceasefire agreement, which has shifted focus back to the oil surplus situation [6]. - A smaller-than-expected output hike agreed by OPEC+ has eased some oversupply concerns [7]. Group 3: Geopolitical Context - Trump's comments regarding China's export controls on rare earth elements, essential for tech manufacturing, have added to market uncertainty [4]. - The ceasefire agreement between Israel and Hamas is part of a broader initiative to stabilize the region, which may influence oil market dynamics [5].