Oil prices remained relatively stable on Wednesday following a volatile trading session, as investors downplayed the impact of China’s newly imposed tariffs on U.S. energy imports. However, renewed efforts by former U.S. President Donald Trump to eliminate Iranian crude exports provided some support to prices.
As of 0210 GMT, Brent crude futures edged down 18 cents (0.24%) to $76.02 per barrel, while U.S. West Texas Intermediate (WTI) slipped 9 cents (0.12%) to $72.61 per barrel.
Volatility and Market Reactions
On Tuesday, oil prices experienced significant fluctuations, with WTI plunging by as much as 3% to its lowest level since December 31. The sharp drop came after China announced tariffs on U.S. oil, liquefied natural gas (LNG), and coal in retaliation for U.S. levies on Chinese goods.
Despite this, prices rebounded after Trump reinstated his “maximum pressure” campaign against Iran, a policy that previously reduced Iranian crude exports to zero.
Analysts at Goldman Sachs noted that the impact of China’s tariffs would be limited, as global supply and demand for these commodities remain unchanged. “Both countries will be able to find alternative markets,” they said in a note on Tuesday.
Iranian Oil Exports and U.S. Stockpile Data
Trump’s move to tighten restrictions on Iran’s oil trade could potentially affect 1.5 million barrels per day of exports, according to ANZ analysts, citing ship-tracking data.
Meanwhile, rising crude and fuel inventories in the U.S. also exerted downward pressure on prices. Data from the American Petroleum Institute (API) showed that U.S. crude stocks increased by 5.03 million barrels in the week ending January 31. Gasoline inventories rose by 5.43 million barrels, while distillate stocks declined by 6.98 million barrels.
The market now awaits the official U.S. government oil inventory report, set to be released later on Wednesday, for further direction.
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