Oil prices slipped on Thursday, following a sharp rally the previous day, as worries about the impact of escalating global trade tensions and the potential consequences for economic growth and energy demand outweighed the optimism fueled by a larger-than-expected decline in U.S. gasoline stocks.
Brent crude futures dropped by 7 cents, or 0.1%, to $70.88 per barrel at 0107 GMT, while U.S. West Texas Intermediate (WTI) crude fell 11 cents, or 0.2%, to $67.57 per barrel.
Both benchmarks had surged about 2% on Wednesday, buoyed by U.S. government data indicating tighter-than-expected oil and fuel inventories. The data showed that U.S. crude stockpiles rose by 1.4 million barrels in the most recent week, less than the 2 million-barrel increase analysts had forecast. Meanwhile, U.S. gasoline inventories fell by 5.7 million barrels, surpassing analysts’ expectations for a 1.9 million-barrel decline. Distillate stocks also dropped more than anticipated.
In addition, the Energy Information Administration (EIA) report revealed that crude inventories in the U.S. Strategic Petroleum Reserve (SPR) had risen to their highest level since 2022.
“The sharp drop in U.S. gasoline inventories raised expectations for a seasonal demand pickup this spring, but mounting concerns over the global economic impact of the tariff wars are overshadowing the positive sentiment,” noted Hiroyuki Kikukawa, chief strategist at Nissan Securities Investment.
“With both positive and negative factors influencing the market simultaneously, it has become increasingly difficult for oil prices to find a clear direction,” he added.
Trade tensions have been escalating, with U.S. President Donald Trump threatening to expand his tariff campaign, targeting European Union goods. Major U.S. trading partners, in turn, have signaled retaliatory measures, heightening concerns about a potential global trade war. Trump’s aggressive trade policies have rattled investors, dampened business confidence, and raised fears of a U.S. recession.
Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) reported that Kazakhstan led a significant increase in February crude output among OPEC+ members, underscoring the challenges the producer group faces in maintaining compliance with agreed production targets. OPEC+ output rose by 363,000 barrels per day in February to 41.01 million bpd.
Despite these challenges, OPEC maintained its forecast for strong global oil demand growth in 2025, though it acknowledged that trade uncertainties are likely to continue contributing to market volatility.
“Trade concerns are expected to remain a key source of volatility as new policies are revealed. However, the global economy is anticipated to adjust over time,” OPEC stated in its monthly report.
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