Oil prices steadied on Thursday following a sharp four-day decline, as hopes of eased U.S. tariffs on Canadian crude provided some relief. However, traders remain cautious amid ongoing trade tensions with Mexico and increased output plans from major oil producers.
By 0144 GMT, Brent crude futures had gained 42 cents, or 0.61%, reaching $69.72 per barrel, while U.S. West Texas Intermediate (WTI) crude rose 40 cents, or 0.6%, to $66.71 per barrel.
The recent selloff saw Brent crude tumble 6.5% over the past four sessions, hitting its lowest point since December 2021, while WTI dropped 5.8%, marking its weakest level since May 2023. The declines followed the U.S. decision to impose tariffs on Canadian and Mexican imports, including energy, at the same time that OPEC+ producers moved to raise production quotas for the first time since 2022.
Some of the bearish sentiment eased after the U.S. announced an exemption for automakers from the 25% tariffs, fueling optimism that trade disruptions might be mitigated. Additionally, a source familiar with the situation indicated that President Donald Trump is considering removing the 10% tariff on Canadian energy imports, including crude oil and gasoline, provided they comply with existing trade agreements.
“Trump’s trade measures are threatening to reduce global energy demand and disrupt trade flows in the global oil market. This was exacerbated by a rise in U.S. inventory,” said Daniel Hynes, senior commodity strategist at ANZ, in a note on Thursday.
Market sentiment remains fragile due to the dual pressures of trade policies and OPEC+’s decision to boost output. The U.S. Energy Information Administration (EIA) reported on Wednesday that crude stockpiles in the world’s largest oil-consuming nation rose more than expected last week due to seasonal refinery maintenance, even as gasoline and distillate inventories declined amid higher exports.
Crude inventories climbed by 3.6 million barrels to 433.8 million barrels, significantly surpassing analyst forecasts of a 341,000-barrel increase, according to a Reuters poll.
Further signs of weakening U.S. oil demand have emerged, with February’s waterborne crude imports falling to a four-year low, largely due to a decline in Canadian shipments to the East Coast. Refinery maintenance, including an extended turnaround at the region’s largest plant, has further suppressed demand.
Meanwhile, tariffs on Mexican crude imports remain in place, adding another layer of uncertainty. Although Mexican crude represents a smaller supply stream compared to Canadian imports, it remains a crucial source for U.S. Gulf Coast refineries.
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