Oil Prices Bounce to $66.68, but Trump’s Tariff Threats Keep Markets on Edge

il prices are creeping up, with Brent crude hitting $66.68 a barrel and West Texas Intermediate (WTI) reaching $63.53, as traders snap up bargains after Monday’s sharp drop. The rebound comes from short-covering, but worries about U.S. tariffs and President Donald Trump’s attacks on Federal Reserve Chair Jerome Powell are casting a shadow. With the U.S., the world’s top oil consumer, facing recession risks, the $2.5 trillion global oil market is bracing for turbulence. Here’s what’s driving the latest moves.

Oil’s Modest Recovery

After a bruising 2% slide on Monday, oil prices ticked higher on Tuesday. Brent crude futures rose 0.6% to $66.68, while WTI for May delivery gained 0.7% to $63.53, and the June contract hit $62.86, per Investing.com data. The uptick follows a sell-off triggered by easing supply fears from U.S.-Iran nuclear talks. Posts on X reflect cautious optimism, with traders noting short-covering—buying to close bearish bets—as the main driver. “Oil’s catching a breather,” says Aiko Tanaka, a 35-year-old commodities trader in Tokyo. “But the mood’s still nervous.”

The rebound is fragile. A Reuters poll on April 17 pegged the U.S. recession risk at nearly 50% within 12 months, driven by Trump’s tariff policies, including 145% duties on Chinese goods. As the U.S. consumes 20% of the world’s 100 million barrels daily, per the Energy Information Administration (EIA), a slowdown could crush demand, keeping oil prices in check.

Trump’s Fed Feud Adds Pressure

Trump’s ongoing clash with Powell is rattling markets. On Monday, he blasted Powell as a “major loser” on X, demanding immediate rate cuts to boost the economy, currently at 4.5% interest rates. The White House is exploring ways to oust Powell, per Reuters, fueling fears of eroding Fed independence. The dollar index hit a three-year low of 97.85, down 8% in 2025, per Bloomberg, boosting oil prices, which are priced in dollars. “Trump’s attacks are shaking confidence,” says Vivek Dhar, an analyst at Commonwealth Bank of Australia. “A weaker dollar helps oil, but demand fears are bigger.”

The S&P 500 and Dow fell over 2% on Monday, per Investing.com, reflecting broader market jitters. Posts on X highlight a 0.4% oil price swing after Trump’s latest comments, underscoring his influence. A weaker U.S. economy could cut oil demand by 1 million barrels daily, per EIA estimates, capping price gains.

Tariff and Iran Talks Weigh

Trump’s tariffs are a major concern. The 145% levies on Chinese imports, matched by Beijing’s retaliation, threaten global trade, which supports 30% of the $105 trillion world economy, per World Bank data. “Tariffs could spark a recession, hitting fuel demand,” says Hiroyuki Kikukawa, chief strategist at Nissan Securities Investment. A Reuters poll predicts U.S. GDP growth slowing to 2% in 2025, down from 2.5% in 2024, partly due to trade disruptions.

Meanwhile, progress in U.S.-Iran nuclear talks is easing supply worries. Iran, producing 3.2 million barrels daily, could boost exports if sanctions are lifted, per Commonwealth Bank’s Dhar. This kept Brent and WTI in a $55–$65 range, says Kikukawa, despite Tuesday’s uptick. Russia’s slashed 2025 Brent forecast, down 17% to $60, per Reuters, adds to the bearish outlook.

Inventory Data in Focus

U.S. crude and gasoline stockpiles likely fell last week, while distillate inventories rose, per a Reuters poll. Official EIA data, due Wednesday, could sway prices. “Lower crude stocks might give oil a lift,” says Tanaka. U.S. inventories dropped 2.5 million barrels in March, per API data, supporting prices. But global oversupply fears, with OPEC+ pumping 26 million barrels daily, keep gains modest, per OPEC reports.

Why It Matters

Oil’s $66.68 level impacts more than traders. Higher prices raise fuel costs, squeezing U.S. consumers, where gasoline averages $3.20 a gallon, per AAA. In Asia, Japan’s $4.9 trillion economy faces export challenges from trade wars, while Australia’s commodity-driven $1.7 trillion economy benefits from oil’s rise. The $180 trillion global financial market is reacting, with gold at $3,471.70 and the yen up 0.5%, per Kitco and Forex.com.

Businesses like ExxonMobil, up 5% this month, gain, but airlines and shipping firms face higher costs. Investors are hedging oil futures, with $15 billion in commodity ETF inflows in Q1 2025, per ETF Trends. The Nikkei 225 and ASX 200, down 1% and 0.5%, reflect tariff unease.

Risks to Watch

Oil faces resistance at $67, with support at $62, per X traders. A tariff escalation or stronger dollar—possible if U.S. retail sales, up 0.2% in March, improve—could cap gains. Trump’s posts, which moved Brent 0.3% last week, remain a wildcard. “Markets are twitchy,” says Tanaka. “One policy shift can tank prices.” Overbought RSI at 65 signals caution, per TradingView.

Tips for Traders

Monitor $67 resistance and $62 support, use stop-losses, and track X for Trump and EIA updates. Avoid big bets until Iran talks and inventory data clarify. “Stay sharp,” advises Tanaka. “Oil’s volatile.” Secure trading platforms to prevent data leaks.

What’s Next?

Oil’s $66.68 rebound is a bright spot, but tariffs and Fed uncertainty loom large. With EIA data and Trump’s next move on deck, volatility is certain. “Oil’s up, but the risks are huge,” says Dhar. As the $2.5 trillion oil market navigates choppy waters, this rally is a fragile one to watch.

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