Oil prices stabilized amid weak trading following concerns over new U.S. tariffs potentially impacting global demand. Brent crude futures were at $74.49, and WTI at $71.23. Analysts highlight a cautious market awaiting clearer tariff details, while U.S. inventories showed mixed results. April 2 is anticipated to reveal significant tariff announcements.
On Wednesday, oil prices stabilized following a drop on Tuesday attributed to concerns over potential new tariffs from the United States that might exacerbate a global trade conflict, consequently reducing crude oil demand. Brent crude futures remained at $74.49 per barrel, whereas U.S. West Texas Intermediate (WTI) crude futures experienced a slight increase to $71.23 after both had previously seen a 0.4% decline. Prices had reached a peak of five-week highs on Monday.
The White House announced on Tuesday that President Donald Trump would introduce new tariffs, although details have not been disclosed. Priyanka Sachdeva, Senior Market Analyst at Philip Nova, remarked that oil prices had increased by approximately 2% in March but have since stabilized as the market anticipates clarity on Trump’s comprehensive tariff plans. The current low trading volumes reflect growing apprehension regarding these tariffs despite some positive demand signals from China.
The Intercontinental Exchange revealed that trading volume for June Brent contracts was 13,936, which significantly contrasts with the total of 672,617 open contracts for that month. Additionally, April 2 is labeled “Liberation Day” by Trump, during which he is expected to unveil a tariff package that may endanger the global trade system.
The decrease in oil prices has been partially mitigated by Trump’s threats to impose secondary tariffs on Russian oil and to intensify sanctions on Iran under his administration’s “maximum pressure” strategy aimed at diminishing Tehran’s exports. Janif Shah, Vice President of Commodity Markets at Rystad Energy, indicated that if Trump’s tariff actions lead to a cessation of hostilities between Russia and Ukraine, the punitive measures might only hold short-term consequences.
Overall, U.S. oil and fuel inventories presented mixed results concerning supply and demand, as reported by the American Petroleum Institute (API). It was noted that U.S. crude oil inventories had risen by 6 million barrels for the week concluding on March 28, with gasoline stocks declining by 1.6 million barrels, while distillate inventories dropped by 11,000 barrels. Furthermore, the Energy Information Administration (EIA) is set to release official U.S. crude oil inventory data later on Wednesday.
In summary, oil prices remained stable on Wednesday amid growing concerns regarding impending U.S. tariffs that may impact global demand. Key market analysts are monitoring the situation closely, with expectations that tariffs could lead to short-term market volatility. The mixed signals from U.S. oil inventories further complicate the outlook as traders await informative data releases.
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