Brent Crude Fell to a 3-year Low Amid Us Demand Worries and Opec+ Uncertainty

Brent crude oil futures dropped by more than 3% to $68.7 per barrel on Wednesday, reaching the lowest level since November 2021, as concerns over increasing supply and trade policy uncertainty weighed on markets. OPEC+ announced plans to boost oil production by 138,000 barrels per day starting in April 2025, marking the first output increase since 2022.

Gold hovered near record highs at around $2 900 per ounce on Wednesday evening, supported by a weaker US dollar and increased demand for safe-haven assets following the introduction of new US tariffs. The 25% duties imposed by US President Donald Trump on imports from Mexico and Canada came into effect on Tuesday, alongside a tariff hike on Chinese goods to 20%, intensifying trade tensions and prompting retaliatory measures.

US stocks rebounded in afternoon trading following reports that the Trump administration announced a one-month tariff exemption on US automakers for imports from Canada and Mexico.

The S&P 500, Nasdaq 100, and Dow Jones all rose by about 1.30%, providing relief after this week's equity selloff. This recovery followed President Donald Trump’s imposition of 25% tariffs on imports from Canada and Mexico, alongside increased levies on Chinese goods.

European stocks surged on Wednesday, offsetting the previous day’s losses as optimism grew that increased public spending on defense would stimulate economic growth. The STOXX 50 index climbed by 1.90% to close at 5 489, while the STOXX 600 gained 0.90% to reach 556. In Germany, the CDU/CSU and SPD coalition agreed to ease strict borrowing regulations, allowing defense spending to exceed 1% of GDP.

The Hang Seng jumped 2.80% to 23 594, reversing losses from the prior session, driven by broad-based gains across sectors. Market sentiment improved after China maintained its GDP growth target at around 5% for 2025, consistent with 2024, regardless of ongoing trade tensions with the US. Beijing also announced new measures to support domestic consumption and the tech industry while lowering its inflation target to 2%. This is the first adjustment in over two decades from the previous 3% goal. Meanwhile, the Nikkei edged up 0.23%, partially recovering from previous losses, as optimism increased about a potential trade agreement between the US, Canada, and Mexico, which helped alleviate concerns over the intensifying global trade tensions.

The ALSI rebounded, gaining 1.14%, while the rand traded positively at R18.39 against the US dollar by 18h00 yesterday. On the economic front, the S&P Global South Africa PMI rose to 49.0 in February 2025, up from 47.4 in January, indicating a slight easing in the contraction of private sector activity. Although output and new orders continued to decline due to weak demand, the rate of decline slowed compared to January. The wholesale and retail sectors experienced the steepest drops, while export sales contracted at the slowest rate in six months.


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