Oil prices steadied on Thursday after a four-session decline, as traders assessed the potential easing of United States tariffs while remaining cautious about ongoing trade restrictions on Mexican imports and OPEC+’s decision to increase output.
By 3:30 pm AEDT (4:30 am GMT), Brent crude was up $0.44 or 0.7% to US$69.75 per barrel, while U.S. West Texas Intermediate (WTI) rose $0.45 or 0.7% to $66.76 per barrel.
The selloff was triggered by U.S. trade policies, which introduced tariffs on Canadian and Mexican energy imports, alongside a decision by major oil producers to raise output quotas for the first time since 2022.
However, market sentiment improved slightly after the U.S. announced an exemption for automakers from a 25% tariff, raising hopes that the economic impact of the trade dispute could be mitigated.
ANZ analysts highlighted in a note: “Geopolitical events are likely to keep the oil market volatile. Russian oil exports have been receding in recent weeks. Trump has warned of maximum pressure on Iran, which could see additional sanctions introduced. Russia and Iran together have been exporting more than 5mb/d of oil. If 0.5-1mb/d of flows is disrupted, it would tighten the market.”
However, OPEC's spare production capacity remains a counterbalancing factor. The group is expected to increase output if supply constraints worsen, potentially stabilising the market in the latter half of the year. Demand concerns may also ease if global economic conditions improve.
On the data front, U.S. crude stockpiles rose more than expected last week, according to the Energy Information Administration (EIA). Inventories increased by 3.6 million barrels to 433.8 million barrels, surpassing forecasts of a 900,000-barrel rise. The buildup was driven by seasonal refinery maintenance, while gasoline and distillate inventories fell due to stronger export demand.
