Global commodity markets plunged Monday as escalating U.S.-China trade tensions sparked a broad-based selloff, with oil prices collapsing to 2021 lows and industrial metals tumbling amid growing recession fears. The selloff extended to agricultural markets, with coffee and cocoa joining the rout after new tariffs targeted key producing nations.
Market Bloodbath Highlights:
⛽ Oil Crisis: Brent crude sank 3% to $62.52/barrel, its lowest since April 2021, while WTI crude fell 10% in a week—the worst slide in 18 months. Analysts blame OPEC+ output hikes colliding with demand destruction fears.
🌽 Agricultural Carnage: Corn fell 0.4% on China tariff threats, while robusta coffee crashed 3% to a 2.5-month low after Vietnam was hit with a 46% U.S. tariff.
Root Causes:
Trade War Escalation: China’s 34% retaliatory tariffs confirmed fears of prolonged economic conflict.
Demand Fears: Wall Street banks now pricing in recession, with Goldman Sachs and Citi slashing oil forecasts.
Liquidation Wave: Equity selloffs forced traders to dump commodities to cover margin calls.
What’s Next?
Oil: A break below $60 WTI could force OPEC+ action.
Gold: Central bank buying may cushion further falls.
Soft Commodities: Vietnam/Ivory Coast trade flows hinge on tariff negotiations.