The slide in crude prices signals deteriorating confidence in the strength of the economy. And while lower oil prices benefit consumers by, ultimately, reducing prices at the pump, they are a big problem for U.S. oil producers, many of which will struggle to make money drilling new wells at these levels.

The price of the U.S. crude that gets exported to China is falling more than the rest of the oil market. Chinese buyers are expected to cut imports of this type of oil after Beijing imposed 34% tariffs in response to the U.

Oil prices plunged as much as 7% on Wednesday, hitting fresh four-year lows before recovering some ground, after China announced additional tariffs on U.S. goods in retaliation against President Donald Trump's tariff policy.