Crude oil prices in New York stabilized after falling back into the $60s per barrel range, as a deteriorating economic outlook dampened prospects for energy demand. Investors retreated from riskier assets, including oil, amid growing concerns over global economic conditions.
West Texas Intermediate (WTI) hovered around $69 per barrel, after a more than 2% decline on Tuesday, marking its lowest close since mid-December. Meanwhile, Brent crude was priced around $73. A sharp drop in US consumer confidence, the steepest since 2021, amplified market unease, particularly as trade tensions linked to President Donald Trump’s tariff policies continued to raise alarm.
In the month of February, crude prices have dropped nearly 5%, with investor sentiment rattled by Trump’s aggressive trade stance, which has added uncertainty to an already sluggish demand outlook. The market’s focus is also on weakening consumption in China, the world’s largest importer of oil, further dragging down prices. Additionally, potential supply shifts are adding to the market’s instability, including the possibility of a resumption of significant pipeline flows from Iraq’s Kurdistan region.
Despite these challenges, recent developments, such as fresh sanctions on Iranian oil exports and expectations that OPEC+ may delay plans to increase production from April, provided some support for prices. A delay in output restoration would mark the fourth time the cartel has postponed the move.
Morgan Stanley analysts, including Martijn Rats, noted that tariffs and counter-tariffs could have a significant impact on oil-intensive sectors of the economy, generating further uncertainty around future demand. They also expect OPEC to maintain its current production quotas beyond April, keeping output largely stable.
Additionally, a mixed report from the American Petroleum Institute (API) on US crude inventories reflected the market’s complexity. While nationwide oil stocks fell by 600,000 barrels in the past week, inventories at Cushing, Oklahoma—the critical storage hub—rose significantly by 1.2 million barrels.
The oil market remains in a delicate balance, weighed down by economic risks and supply concerns while being supported by geopolitical factors and OPEC+ decisions.
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