Oil Prices Rebound Amid Tariff Worries and Supply Concerns

Oil prices edged higher in Asian trade Wednesday, recovering slightly after hitting three-year lows due to growing concerns over U.S. tariffs and slowing global economic growth. Market focus is now on OPEC’s monthly report, expected to provide key insights into supply and demand trends after the cartel recently agreed to a modest production increase.

Brent crude futures for May delivery rose 0.5% to $69.92 a barrel, while WTI crude climbed 0.6% to $66.30 a barrel. The rebound comes as traders anticipate potential supply disruptions, particularly after Ukraine claimed an attack on a major Russian oil refinery. However, market sentiment remains fragile amid fears of weaker demand and continued trade tensions.

The oil market’s recent slump was fueled by U.S. President Donald Trump’s decision to impose steep tariffs—25% on Canada and Mexico and 20% on China—sparking a global trade war. While temporary relief was granted to Canada and Mexico, retaliatory measures from affected countries have added to market uncertainty. Canadian officials have even threatened to curb energy exports to the U.S., which could tighten supply if tariffs escalate further.

Traders are closely monitoring OPEC’s report for signals on future production plans, as several member nations have suggested increasing output in 2025. The cartel’s demand outlook is also under scrutiny, particularly with China ramping up economic stimulus efforts.

Additionally, the market awaits key U.S. economic data, including crude inventory levels and CPI inflation figures. A larger-than-expected U.S. inventory build, reported by the American Petroleum Institute, suggests a similar trend in official data. Meanwhile, February’s CPI data is expected to indicate persistent inflation, reducing the likelihood of near-term monetary easing.