Oil up on weak dollar, tariff concerns cap gains
Shafaq News/Oil prices edged up on Wednesday, supported by a weaker dollar, but gains werecapped by mounting fears of a U.S. economic slowdown and the impact of tariffson global economic growth.
Brentfutures rose 37 cents, or 0.53%, to $69.93 a barrel at 0951 GMT, while U.S.West Texas Intermediate crude futures gained 37 cents, or 0.53%, to $66.62 abarrel.
Crude hasbeen supported in recent days by a weaker U.S. dollar and the EnergyInformation Administration (EIA) moving away from earlier calls of stronglyoversupplied oil markets this year, UBS analyst Giovanni Staunovo.
The dollarindex (.DXY) which fell 0.5% to fresh 2025 lows on Tuesday, boosted oil pricesby making crude less expensive for buyers holding other currencies.
"Easingdollar counters the bearish bias of global economic slowdown, although thisseems short-lived," said Priyanka Sachdeva, senior market analyst atPhillip Nova.
U.S. stockprices fell again on Tuesday, adding to the biggest selloff in months, withinvestors rattled over increased tariffs on imports and souring consumersentiment.
"Fearsof a U.S. recession, weakness in U.S. stock markets and concerns over tariffsaffecting key oil players such as China, introduced additional marketuncertainty and these factors could continue to fuel a bearish sentiment,putting a lid on oil prices," said Hassan Fawaz chairman and founder ofbrokerage GivTrade.
U.S.President Donald Trump's economic policies so far have centered on a blitz oftariff announcements. Some have taken effect and others have been delayed orare set to kick in later.
Marketsworry that tariffs could raise prices for businesses, boost inflation andundermine consumer confidence in a blow to economic growth.
Over theweekend, Trump said a "period of transition" was likely and declinedto rule out a U.S. recession. Investors are waiting for U.S. inflation data dueon Wednesday for clues on the path of interest rates. They also are closelymonitoring OPEC+ plans. The producer group has announced plans to increaseoutput in April.
"Overallsentiment remains fragile despite a slight bounce in today's session,"said Yeap Jun Rong, market strategist at IG.
"Fornow, oil market sentiments are likely to stay contained, with tariffdevelopments still lacking clarity and persistent concerns over U.S. growthrisks," Yeap added.
On thesupply side, U.S. crude oil production is poised to set a larger record thisyear than prior estimates, at an average 13.61 million barrels per day, theU.S. Energy Information Administration said on Tuesday.
In the U.S.,crude oil stockpiles rose by 4.2 million barrels in the week ended March 7,while gasoline inventories fell by 4.6 million barrels, market sources said,citing American Petroleum Institute figures on Tuesday.
Markets nowawait government data on U.S. stockpiles due on Wednesday for further tradingcues.
(Reuters)
