By Paul Carsten
LONDON (Reuters) -Oil prices rose on Thursday, recovering slightly from a multi-year low, though Brent was still below $70 under pressure from trade tariffs between the United States, Canada, Mexico and China and OPEC+ plans to raise output.
Those factors and a larger than expected build in U.S.
crude inventories had sent Brent as low as $68.33 on Wednesday, its weakest since December 2021.
Brent futures were up 53 cents, or 0.8%, at $69.83 a barrel by 1246 GMT on Thursday while U.S. West Texas Intermediate crude futures gained 54 cents, also 0.8%, to $66.85.
“The US President’s intention seems to be for a lower oil price,” said John Evans at oil broker PVM, adding that questions remain around whether crude is being oversold.
Prices had fallen after the U.S.
enacted tariffs on Canadian and Mexican goods, including energy imports, at the same time major producers decided to raise output quotas for the first time since 2022.
Oil recovered and stabilised somewhat after the U.S.
said it will make automakers exempt from the 25% tariffs.
A source familiar with the discussions said that U.S. President Donald Trump could eliminate the 10% tariff on Canadian energy imports, such as crude oil and gasoline, that 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,” ANZ commodity strategist Daniel Hynes said in a note.
The OPEC+ producer group, comprising the Organization of the Petroleum Exporting Countries and allies including Russia, decided on Monday to increase output for the first time since 2022.
The resulting retreat in prices was then exacerbated on Wednesday by a rise in U.S.
crude inventories, said ANZ’s Hynes.
Crude stockpiles in the U.S., the world’s biggest oil consumer, rose more than expected last week, buoyed by seasonal refinery maintenance, while gasoline and distillate inventories fell because of a hike in exports, the Energy Information Administration said on Wednesday.
There are further signs of weakness in American oil demand, with U.S.
waterborne crude oil imports dropping to a four-year low in February, driven by a fall in Canadian barrels shipped to the East Coast, ship tracking data shows. Demand was subdued by refinery maintenance including a long turnaround at the largest plant in the region.
Tariffs also remain in effect on U.S.
imports of Mexican crude, a smaller supply stream than Canadian crude but an important one for U.S. refineries on the Gulf Coast.
Layoffs announced by U.S.-employers jumped to levels not seen since the last two recessions amid mass federal government job cuts, cancelled contracts and fears of trade wars, global outplacement firm Challenger, Gray & Christmas said on Thursday.
Meanwhile, Chinese officials have flagged that more stimulus is possible if economic growth slows, seeking to support consumption and cushion the impact of an escalating trade war with the United States.
(Reporting by Paul Carsten in London, Siyi Liu in Singapore and Georgina McCartney in HoustonEditing by David Goodman, Kirsten Donovan)
