Oil News: Crude Rebounds but OPEC Output Hike Clouds Outlook

Oil Prices Rebound, but Brent Stays Below $70 as Tariffs and Supply Pressures Weigh

Crude oil prices saw a modest recovery on Thursday, stabilizing after Brent crude hit a multi-year low of $68.33. However, Brent remained under $70 per barrel, pressured by ongoing trade tariffs between major economies and OPEC+’s decision to raise production quotas.

Brent crude was up, while WTI gained. The rebound followed the U.S. government’s decision to exempt automakers from certain tariffs, offering a degree of relief to energy markets. However, traders remain cautious as geopolitical and economic factors continue to weigh on the market.

U.S. Inventory Build and Trade Tariffs Add Bearish Pressure

The latest Energy Information Administration (EIA) data showed that U.S. crude inventories rose by 3.6 million barrels, exceeding expectations. The increase was driven by seasonal refinery maintenance, which reduced crude processing rates. Refineries operated at 85.9% of capacity, down from the previous week.

Gasoline and distillate fuel inventories declined by 1.4 million barrels and 1.3 million barrels, respectively, largely due to increased exports. Meanwhile, total commercial petroleum inventories fell by 4.6 million barrels, indicating some tightening in refined product supply.

Tariffs imposed by the U.S. on Canadian and Mexican energy imports continue to disrupt trade flows. While there are reports that the 10% tariff on Canadian crude could be lifted, uncertainty around Mexican imports remains. This could strain Gulf Coast refiners that rely on Mexican crude for blending.

OPEC+ Supply Increase Meets Weak Demand Signals

The OPEC+ alliance decided to increase output quotas for the first time since 2022, adding further downward pressure on prices. While the group has not specified the scale of the production boost, the move reflects confidence in supply resilience despite demand risks.

Meanwhile, U.S. crude imports hit a four-year low in February, driven by declining Canadian shipments to the East Coast. This signals softer demand as refiners undergo seasonal maintenance. In addition, Chinese officials have indicated they may introduce further economic stimulus to support domestic consumption and offset the impact of the U.S.-China trade war.

Market Outlook: Short-Term Bearish Bias Persists

Crude prices may face continued downside pressure as tariff uncertainty, rising U.S. inventories, and OPEC+ production increases weigh on sentiment. While the market has shown resilience with a mild recovery, demand concerns—particularly in the U.S. and China—suggest limited upside in the near term.

Traders will closely monitor potential tariff adjustments and Chinese economic measures for any signs of demand recovery. Until then, oil prices remain vulnerable to further declines, with Brent likely to struggle to break above $70 in the immediate future.

More Information in our Economic Calendar.