Baghdad, Iraq- Oil prices saw a modest rebound on Thursday, with Brent futures rising by 39 cents, or 0.56%, to $69.69 per barrel at 0416 GMT, and U.S. West Texas Intermediate (WTI) crude climbing 39 cents, or 0.59%, to $66.70 per barrel.
This uptick follows a sharp decline over the previous four sessions. Brent dropped 6.5% to its lowest level since December 2021, while WTI fell 5.8% to a low not seen since May 2023.
Yeap Jun Rong, market strategist at IG, noted, “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 stabilize from oversold territory.” He also warned that the recovery remains fragile, with unfavorable supply-demand dynamics continuing to weigh on sentiment.
The price drop followed U.S. tariffs on Canadian and Mexican goods, including energy imports, and the decision by major oil producers to increase output quotas for the first time since 2022. However, the decline began to ease after the U.S. announced that automakers would be exempt from the 25% tariffs, sparking some optimism that the impact of the trade dispute could be less severe than initially feared.
Moreover, a source familiar with discussions revealed that U.S. President Donald Trump might eliminate the 10% tariffon Canadian energy imports, such as crude oil and gasoline that comply with existing trade agreements.
Daniel Hynes, senior commodity strategist at ANZ, noted that Trump’s trade measures threaten to reduce global energy demand and disrupt trade flows, which adds to the negative pressure on oil prices. He added that the rise in U.S. crude inventories also exacerbated the situation.
Market sentiment remains bearish, largely due to the dual effects of the tariffs and OPEC+’s decision to increase output. The Energy Information Administration (EIA) reported that U.S. crude stockpiles rose by 3.6 million barrelsto 433.8 million barrels, far surpassing analysts’ expectations. Meanwhile, gasoline and distillate inventories fell, partly due to increased exports.
In addition, U.S. oil demand shows signs of weakening, with waterborne crude imports dropping to a four-year low in February, driven by a decrease in Canadian shipments to the East Coast. This decline is attributed to ongoing refinery maintenance, including a long turnaround at the region’s largest plant, which has reduced demand for crude.
