Europe's gas slump: Tariffs trigger economic turbulence
Natural gas prices in Europe fell by 8% following declines of over 10% in early April. This is due to concerns about an economic slowdown triggered by tariffs introduced by U.S. President Donald Trump, which would reduce demand for energy and raw materials, reports Bloomberg.
Natural gas prices in Europe continued to fall amid increasing market instability, which was affected by new trade restrictions imposed by President Donald Trump's administration.
Following declines of over 10% in early April, gas futures on Monday fell by another 8%. This drop is due to fears that the trade war and tariffs may cause a global economic slowdown, resulting in decreased demand for energy, including natural gas, reports Bloomberg.
Moreover, owing to the gas price drops, which are now roughly half of what they were in February, the gas storage market situation in Europe has improved. Lower summer gas prices may aid in replenishing depleted storage before the coming winter, reports Bloomberg. Additionally, the reduction in winter gas prices compared to summer contracts has increased incentives for stockpiling.
Another factor that alleviated pressure on fuel markets was milder weather forecasts for northwestern Europe. The drop in gas prices, which was 7% for the Dutch futures, has reached an oversold level.
Oil prices also down
U.S. oil prices also fell below $60 (approximately £46) per barrel, reaching their lowest level since April 2021, associated with 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 down the economy.
JPMorgan and Allianz suggest that the new tariffs might plunge the U.S. and the world into a recession as early as 2025, with a projected increase in U.S. recession risk to 60%. Economists stress that Trump's aggressive trade policy might raise production costs, curtail the oil demand, and keep prices low.
Trump imposes tariffs on the entire world
On 2 April, Donald Trump announced drastic tariffs on almost the world: 10% on all imports and 25% on foreign cars. He then unveiled a list of countries and tariff rates that would apply. General tariffs came into effect on 5 April, with additional tariffs for specific countries to take effect on 9 April.
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 retaliatory tariffs aimed, for example, at Brazil, reaching 10%.
