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WASHINGTON (AP) — Oil prices swung wildly on Wednesday, sinking to a four-year low in anticipation of slowing economic growth due to a burgeoning trade war, before jumping 2% after President Donald Trump announced a 90-day pause on most of his tariffs.
U.S. benchmark crude followed U.S. markets higher in the afternoon rising 2%, or $1.20, to $60.79 per barrel after the latest reversal by the Trump administration.
That's after it declined 4.3% to $56.98 per barrel as late as midday on the New York Mercantile Exchange. Prices had fallen further earlier in the day to levels not seen since February 2021, the depth of the COVID-19 pandemic.
Energy prices mostly have been in decline since Trump's inauguration in January, with the cost of a barrel of oil sliding about $20 since the start of the year. At this time last year, a barrel of U.S. crude cost $85. A barrel was going for around $71 at the beginning of April, before tariffs were launched.
Brent crude, the European standard, also climbed into positive territory Wednesday to $63.90 per barrel.
The most recent swoon in energy prices arrived when Trump’s latest round of tariffs kicked in after midnight, including a 104% tax on goods coming from China. The world’s second-largest economy quickly retaliated, with Beijing saying it would raise tariffs on imported U.S. goods to 84% on Thursday.
European Union member states followed suit, issuing retaliatory tariffs on $23 billion in goods. For now, the targeted items are a tiny fraction of the 1.6 trillion euros ($1.8 trillion) in U.S.-EU annual trade.
Rapidly falling oil prices signal pessimism about economic growth and can be a harbinger of a recession as manufacturers cut production, businesses cut travel costs and families rethink vacation plans.
Delta Air Lines. which had anticipated a record year, pulled its financial forecasts for 2025 on Wednesday as the trade war scrambles expectations for business and household spending and depresses bookings across the travel sector.
“With broad economic uncertainty around global trade, growth has largely stalled,” said Delta CEO Ed Bastian.
Shares of major U.S. oil companies fell as well Wednesday.
“We are going into a recession," Neil Dutta of Renaissance Macro Research wrote in a note to clients. “I don’t think it is especially controversial to say so.”
