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First Look - Oil falls to four-year low with back-to-back $4/Bbl losses

Oil prices plunge to a four-year low
- WTI crude fell sharply, closing down $4.76/Bbl on Thursday, followed by another $4.45/Bbl decline on Friday morning (7:45 AM CT)
- Brent prices also slid 13% over two days, with WTI futures reaching their lowest levels since 2021
- Contributing to the selloff, China announced a 34% tariff on all US imports starting April 10, along with new export controls on rare earth materials, in response to the recent “Liberation Day” tariffs
  - (For a detailed breakdown of the President’s latest tariffs, see our full write-up here)
- The combination of an escalating trade war and rising OPEC+ production has triggered a broad reassessment of the oil market outlook
Bearish Sentiment Surges in Oil Options Market (Bloomberg)
- Trading volume for WTI put options spiked to 250,000 contracts, the highest since the early COVID-19 market crash in April 2020
- June $50 WTI put options were the most actively traded WTI contracts on Thursday, signaling increased hedging against further downside in crude prices

Natural gas is down 17c and heading for a weekly loss
- The May Henry Hub contract is down slightly on the week, with prices sliding below $4/MMbtu
- Production has averaged about 105.3 Bcf/d this week, according to data from S&P
- LNG feedgas demand remains robust at 16.2 Bcf/d, although inflows to LNG plants should begin to trend lower as temperatures warm up along the US Gulf Coast
European gas prices fall with tariffs seen hurting demand (BBG)
- Natural gas prices in Europe have hit a six-month low, on expectations that trade wars could impact global energy demand and reduce tightness in LNG markets
- Rabobank strategists said in a note that, “some countries might look at increasing US LNG imports in the future to reduce tariffs, while others might do the opposite,”
- Despite the decline in European and Asian prices, the arbitrage between Henry Hub and TTF remains open