Oil Prices Stabilize Amid Concerns Over New U.S. Tariffs

Oil prices stabilized after a previous decline amid concerns over new U.S. tariffs, potentially impacting global demand. Brent crude futures closed at $74.49 per barrel, while WTI rose slightly to $71.23. Analysts highlight low trading volumes and await clarity on tariffs, with U.S. inventory data indicating mixed supply and demand conditions.

On Wednesday, oil prices stabilized following a decline in the previous session amid concerns regarding new U.S. tariffs that could potentially escalate a global trade war and diminish crude oil demand. Brent crude futures closed at $74.49 per barrel after a 0.4% decrease, while U.S. West Texas Intermediate (WTI) crude futures increased by 3 cents to $71.23 after also experiencing a 0.4% drop. Notably, prices had peaked at their highest in five weeks on Monday.

The White House announced on Tuesday that President Donald Trump would implement new tariffs, although specific details were not disclosed. Priyanka Sachdeva, Senior Market Analyst at Philip Nova, indicated that oil prices had risen about 2% in March but have since stabilized as the market awaits further details on the tariffs, with low trading volumes reflecting heightened concerns despite some indicators of demand from China.

Intercontinental Exchange data revealed that the trading volume for June Brent contracts reached 13,936, contrasted with a total of 672,617 open contracts. Trump has labeled April 2 as “Liberation Day,” during which he is expected to unveil a tariff package that could disrupt the global trade system.

The recent decline in oil prices has been moderated by Trump’s threats to impose secondary tariffs on Russian oil and intensify sanctions against Iran as part of his administration’s strategy to exert “maximum pressure” on Tehran to reduce its exports. Janif Shah, Vice President of Commodity Markets at Rystad Energy, mentioned that if Trump’s tariff strategy leads to a resolution in the Russia-Ukraine conflict, the punitive measures could potentially have a short-term effect.

U.S. oil and fuel inventories presented a mixed picture regarding supply and demand trends in the leading oil-producing and consuming nation. The American Petroleum Institute reported a rise of 6 million barrels in U.S. crude oil inventories for the week ending March 28, while gasoline stocks decreased by 1.6 million barrels, and distillate inventories showed a minor drop of 11,000 barrels. The Energy Information Administration is expected to release official U.S. crude oil inventory data later on Wednesday.

In conclusion, oil prices are currently stabilizing due to uncertainties surrounding new tariffs from the U.S. government, impacting market sentiment. While prices had recently peaked, concerns persist regarding potential trade tensions and their effect on demand. Data from various sources presents a complex picture of inventory levels, reflecting the ongoing volatility in the oil market as stakeholders await further developments.

Original Source: www.jordannews.jo