Oil hits four-year low on US-China trade war, Brent, WTI slump 16% in one week: How to place bullish bets on MCX crude? | Stock Market News

Oil prices plunged as much as 7% on Wednesday, hitting fresh four-year lows before recovering some ground, after China announced additional tariffs on U.S. goods in retaliation against President Donald Trump’s tariff policy.

China will impose 84% tariffs on U.S. goods from Thursday, up from the previously announced 34%, the finance ministry said. Brent futures were down $2.47, or 3.9%, to $60.35 a barrel at 1423 GMT. U.S. West Texas Intermediate crude futures were down $2.35, or 3.9%, at $57.23.

Both contracts lost about 7% before paring losses.

Trump’s 104% tariffs on China kicked in from 12:01 a.m. EDT (0401 GMT) on Wednesday, ratcheting up duties after Beijing failed to lift its initial retaliatory tariffs on U.S. goods.

European Union countries, meanwhile, are expected to approve the bloc’s first countermeasures against Trump’s tariffs on Wednesday, adding to China’s and Canada’s retaliatory measures. Brent and WTI have fallen for five sessions since Trump announced sweeping tariffs on most imports, prompting concerns over economic growth and demand for fuel.

Goldman Sachs now forecasts that Brent and WTI could be at $62 and $58 a barrel respectively by December 2025 and $55 and $51 by December 2026.

Oil has lost about one-fifth of its value since Trump announced higher tariffs on a range of U.S. trading partners on April 2, the biggest five-day drop since March 2022.

Morgan Stanley analysts lowered their price forecasts for Brent crude by $5 a barrel to $65 for the second quarter, $62.50 for the third quarter and $62.50 for the fourth.

According to Gyan Ranjan Singh, Commodity Analyst, Choice Broking, “Recently, the price of Crude oil on the MCX fell to a four-year low close to 4,975, breaking through a significant long-term support level. With a descending triangle breakdown and the price trading below all significant weekly moving averages, the technical situation is now negative.”

Although the oversold zone raises the prospect of a brief recovery, a rise in volume during the breakdown and an RSI reading close to 21 indicate a strong bearish sentiment.  The next crucial level is at 4,666, and the 4,870–4,800 area is providing immediate support.

For investors wishing to take bullish wagers, this oversold scenario presents an opportunity for a tactical comeback trade.  A low-risk entry might be made in the 4,870-4,800 range, with a stop loss of below 4,600 and upside targets of 5,380 and 5,535.  Swing traders can look for bullish reversal candlestick patterns and RSI divergence on the daily chart as confirmation before entering.

Investors should maintain a cautious size position, respect critical support levels, and trail profits as crude tries resistance zones on the way up.