Oil prices rose on Wednesday, recovering slightly after heightened concerns regarding U.S. trade tariffs and a slowdown in economic growth caused prices to dip to levels not seen in over three years. The attention has now shifted firmly to a monthly report from the Organization of Petroleum Exporting Countries (OPEC), as traders seek additional insights on supply, particularly following the cartel’s decision to commence increasing production earlier this month.
Oil gains ground despite market anxiety
Oil managed to gain some ground this week after plummeting to more than three-year lows, although market sentiment remained largely jittery due to ongoing worries about diminishing demand and disruptions related to tariffs. Expectations of potential supply interruptions in Russia also provided a lift to prices after Ukraine asserted that it had targeted a significant oil refinery in Moscow. This development occurred following Kyiv’s agreement to a tentative ceasefire deal mediated by the U.S., which Moscow has yet to accept.
Brent oil futures for May delivery increased by 0.5 percent to $69.92 per barrel, while West Texas Intermediate crude futures rose by 0.6 percent to $66.30 per barrel as of 21:34 ET (01:34 GMT).
Canada threatens oil export curbs over U.S. tariffs
Oil markets have faced a downturn over the past three weeks due to apprehensions regarding increased tariffs under U.S. President Donald Trump. Last week, Trump imposed a 25 percent tariff on Canada and Mexico, alongside a 20 percent duty on China, the top importer of oil. Although Trump did order temporary relief for Canada and Mexico, these countries, along with China, announced their own retaliatory actions, signifying the onset of a global trade conflict.
Canadian officials have threatened to restrict energy exports to the U.S., a scenario that could lead to tighter oil supplies. However, such actions will depend on the U.S. enforcing more stringent tariffs. Trump has consistently maintained his threats of reciprocal tariffs, which he states will be implemented in early April.
Read more: Oil prices drop to $68.77, nearing three-year low on tariff fears
OPEC report awaited for demand, supply cues
Wednesday’s focus was on OPEC’s monthly report, which is released just weeks after the cartel acquiesced to Trump’s demands for a slight increase in production. The report is anticipated for additional clarity regarding the cartel’s production strategies, as several member nations have indicated plans to further increase output in 2025.
The OPEC’s forecast for global demand— which has been gradually revised downward over the past year—will also be closely monitored, particularly in light of indications of more stimulus measures in China, the leading oil importer.
U.S. inventories, CPI data awaited
Traders are also looking forward to more insights regarding the world’s largest oil consumer, with inventory and consumer price index inflation data expected later on Wednesday. Data from the American Petroleum Institute indicated a significantly larger-than-anticipated buildup in U.S. inventories, suggesting a similar trend in the forthcoming official inventory data.
CPI data is projected to reveal that inflation remained largely persistent in February, indicating limited prospects for monetary easing in the near future.
