Oil prices fell more than $1 a barrel on Tuesday, trading at their lowest in four years, as recession fears exacerbated by the trade conflict between the U.S. and China, the world's two largest economies, offset a recovery in stock markets.

Brent crude futures were down $1.39, or 2.16%, at $62.82 a barrel. U.S. West Texas Intermediate crude futures were down $1.12, or 1.85%, at $59.58.

Brent crude futures fell more than $2 a barrel during the session.

The two benchmarks had fallen 14% and 15%, respectively, on Monday following U.S. President Donald Trump's April 2 announcement of "reciprocal tariffs" on all U.S. imports. The U.S. will impose 104% tariffs on China starting at 12:01 a.m. EDT on Wednesday, a White House official said after Beijing failed to lift its retaliatory tariffs on U.S. goods by a noon Tuesday deadline set by Trump. Both benchmarks fell more than $1 a barrel after the news.

On Tuesday, Beijing vowed not to bow to what it called U.S. "blackmail" after Trump threatened an additional 50% tariff on Chinese goods if the country did not lift its 34% retaliatory tariffs. China's Commerce Ministry said the country "will fight to the bitter end," raising concerns about a global economic contraction. "The scenario has presented a case for a global recession, with concerns about a drop in energy demand already emerging," Alex Hodes, director of market strategy at financial services firm StoneX, said in a note. U.S. Trade Representative Jamieson Greer told U.S. senators on Tuesday that China has not indicated it wants to work toward reciprocity on trade.

Goldman Sachs estimates that Brent and WTI crude prices will be at $62 and $58 per barrel in December 2025, respectively, and at $55 and $51 a year later, respectively, under different scenarios.

The U.S. government has indicated a strong preference for lower crude prices to $50 or lower, considering this goal a top priority among its objectives, according to Natasha Kaneva, global head of commodity strategy at J.P. Morgan.

"This includes a willingness to endure a period of industry disruption similar to that experienced by the shale sector during the 2014 price war between OPEC and shale, if it ultimately results in lower oil production costs," Kaneva said. (Newsmaker23)

Source: Reuters