Oil prices were up around 1 per cent on Tuesday, rebounding from a near four-year low in the previous session on concerns that US tariffs might depress demand and lead to a global recession, though analysts warned downside risks remain.

Brent futures were up 66 cents, or 1 per cent, at $64.87 per barrel, while US West Texas Intermediate crude futures rose 67 cents, or 1.1 per cent, to $61.37, at 0650 GMT.

As of Monday, Brent and WTI had slumped 14 per cent and 15 per cent respectively following US President Donald Trump’s April 2 announcement of “reciprocal tariffs” on all imports.

Oil prices recouped some of those losses in a relief rally aided by steadier equity markets, said Warren Patterson, head of commodities strategy at ING.

“The market has sold off heavily in recent days as it starts to price in a significant demand hit; however, how much of a demand hit we see is still very unclear,” he said.

An ING note on Tuesday also said risks were still skewed to the downside due to US President Donald Trump’s threats of an additional 50 per cent tariff on Chinese goods if it did not lift its 34 per cent retaliatory tariff by Tuesday.

“It’s unlikely that China will reverse the policy. As such, we’re likely to see further escalation, which will only exacerbate growth concerns and worries over oil demand,” the note said.

On Monday, oil prices slid 2 per cent due to fears that President Trump’s latest trade tariffs could thrust global economies into recession and diminish energy demand. Markets, however, anticipate a potential limit to the downward trajectory of oil prices.

Trump maintains that the tariffs – a minimum of 10 per cent for all US imports, with targeted rates of up to 50 per cent – would facilitate the revival of the US industrial base which he says has been declining due to decades of trade liberalisation.

While many countries are seeking an exemption or at least a reduction in the tariffs, some, including China, the world’s second-largest economy after the US, have announced plans for reciprocal tariffs.

Beijing has publicly stepped up efforts to stabilise its capital market, and vowed not to bow to “blackmail” from the US

“Should China stand firm, the total tariff rate on its imports to the US would climb to an astonishing 104 per cent, a move likely to trigger a further souring of risk sentiment, steep drops in global stock markets and accelerate the pace of the global economy’s descent into recession,” Tony Sycamore, market analyst with IG, said in a note.

A preliminary Reuters poll showed on Monday that US crude oil and distillate inventories were expected to have risen last week on average by around 1.6 million barrels, in another sign of the market expecting demand to be weak.

Weekly inventory data is due from the American Petroleum Institute industry group later on Tuesday, and official data from the Energy Information Administration is due on Wednesday.