Crude oil prices remained depressed after dropping to the lowest in almost four years earlier in the week as tariffs on Mexican and Canadian imports into the U.S. went into effect on Tuesday, triggering a selloff.
Reports that OPEC+ will go ahead with a planned partial rollback of its production cuts in April contributed to the bearish mood on oil markets.
At the time of writing, Brent crude was trading at $69.72 per barrel and West Texas Intermediate was changing hands for $66.72 per barrel, both up from opening in Asia.
“There is a bit of a concern in the market that the OPEC+ decision is the start of a series of more monthly supply additions, but the statement from OPEC+ reiterates an approach in bringing back barrels only if the market can absorb them,” UBS analyst Giovanni Staunovo said.
“The sharp dip in oil prices below the key $70.00 level may prompt a slight breather in today’s session, as technical conditions attempt to stabilise from oversold territory,” IG analyst Yeap Jun Rong told Reuters.
“However, recovery momentum remains fragile, with unfavourable supply-demand dynamics being a key overhang for bullish sentiment,” the analyst added.
Adding to the downward pressure on prices, the Energy Information Administration estimated a weekly build in U.S. crude oil inventories, pegging it at 3.6 million barrels for the final week of February. In fuels, the EIA estimated inventory declines but market watchers ignored these in favor of the crude oil inventory build.
Bloomberg noted in a report earlier today that crude oil prices had shed a fifth of their value since the start of the year, as President Trump’s trade policies shook markets, prompting the targets of the tariff push to respond with in-kind measures of their own, signaling riskier times for global trade ahead.
By Irina Slav for Oilprice.com
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