Oil climbs from multi-year low, tariff concerns and rising supply weigh
Shafaq News/ Oil prices rose on Thursdayafter heavy sell-offs drove the market to a multi-year low, however, tariffuncertainties and a rising supply outlook capped gains.
Brent futures were trading up 39 cents, or0.56%, at $69.69 a barrel by 0416 GMT, while U.S. West Texas Intermediate crude(WTI) futures climbed 39 cents, or 0.59%, to $66.70 a barrel.
Brent plunged 6.5% in the previous foursessions, dropping to its lowest since December 2021 on Wednesday, while WTIfell 5.8% over the same period to its lowest since May 2023.
"The sharp dip in oil prices below thekey $70.00 level may prompt a slight breather in today's session, as technicalconditions attempt to stabilise from oversold territory," said Yeap JunRong, market strategist at trading platform IG.
"However, recovery momentum remainsfragile, with unfavourable supply-demand dynamics being a key overhang forbullish sentiment," he added.
Prices fell after the U.S. enacted tariffson Canadian and Mexican goods, including energyimports, at the same time major producers decided to raise output quotas forthe first time since 2022.
The decline eased as the U.S. said it will exempt automakers from the 25% tariffs, raisingoptimism the impact of the trade dispute may be mitigated.
Additionally, a source familiar with thediscussions said that U.S. President Donald Trump may eliminate the 10% tariffon Canadian energy imports, such as crude oil and gasoline that comply withexisting trade agreements.
"Trump’s trade measures are threateningto reduce global energy demand and disrupt trade flows in the global oilmarket. A rise in U.S. inventory exacerbated this," Daniel Hynes, seniorcommodity strategist at ANZ, said in a note on Thursday.
Market sentiment remains bearish from thedouble impact of the tariffs and the decision by OPEC+, the Organization of thePetroleum Exporting Countries and allies including Russia to raise output.
Crude stockpiles in the U.S., the world'sbiggest oil consumer, rose more than expected last week amid seasonal refinerymaintenance, while gasoline and distillate inventories fell due to a hike inexports, the Energy Information Administration said on Wednesday.
Crude inventories rose by 3.6 million barrelsto 433.8 million barrels in the week, the EIA said, far exceeding analysts'expectations in a Reuters poll for a 341,000-barrel rise.
There are further signs of weakness inAmerican oil demand, with U.S. waterborne crude oil imports dropping to afour-year low in February, driven by a fall in Canadian barrels shipped to theEast Coast, according to ship tracking data, as refinery maintenance, includinga long turnaround at the largest plant in the region, quashed demand.
(REUTERS)
