European gas prices plunge amid Trump's sweeping tariffs
Natural gas prices in Europe dropped by 8% following more than 10% declines in early April. This decrease is due to concerns about an economic slowdown triggered by tariffs introduced by U.S. President Donald Trump, resulting in reduced demand for energy and raw materials, reports Bloomberg.
Natural gas prices in Europe continued to fall due to increasing market instability, which was affected by new trade restrictions imposed by President Donald Trump's administration.
After declining more than 10% in early April, gas futures on Monday fell by an additional 8%. This decrease is due to fears that the trade war and tariffs might cause a global economic slowdown, leading to reduced demand for energy, including natural gas, reports Bloomberg.
Additionally, in light of gas price drops, which are now nearly half of what they were in February, there has been an improvement in the gas storage market situation in Europe. Lower gas prices in summer may help fill depleted storage before the upcoming winter, reports Bloomberg. Moreover, the reduction in winter gas prices compared to summer contracts has increased incentives for stockpiling.
Gentler weather forecasts for northwestern Europe also contributed to reducing pressure on fuel markets. The 7% drop in gas prices in the Dutch futures has reached an oversold level.
Oil prices also down
U.S. oil prices also fell below $60 per barrel, reaching their lowest level since April 2021, related to President Donald Trump's tariff policy.
The newly imposed tariffs have raised concerns about a negative impact on the U.S. and global economies, with forecasts indicating a risk of recession. West Texas Intermediate (WTI) crude futures dropped by over 3%, and experts warn that higher business prices could slow economic growth.
JPMorgan and Allianz suggest that the new tariffs might lead to a U.S. and global recession as early as 2025, with a projected increase in the risk of a U.S. recession to 60%. Economists emphasize that Trump's aggressive trade policy might raise production costs, reduce the oil demand, and keep prices low.
Trump imposes tariffs on the entire world
On April 2, Donald Trump announced drastic tariffs on nearly the world: 10% on all imports and 25% on foreign cars. He then revealed a list of countries and the applicable tariff rates. General tariffs went into effect on April 5, with additional tariffs for specific countries to take effect on April 9.
American tariffs on the EU will reach 20%. This is less than the new tariffs Donald Trump plans to impose on China, which will be as high as 34%, but more than the retaliatory tariffs aimed, for instance, at Brazil, which will reach 10%.
