Oil prices trimmed earlier losses on Tuesday despite concerns over the global economic impact of tariffs, a potential US recession, and OPEC+ output increase plans.
The international benchmark Brent crude increased by 0.5%, trading at $69.32 per barrel at 10.48 a.m. local time (0748 GMT), up from $68.97 at the close of the previous session.
The US benchmark West Texas Intermediate rose by 0.48%, settling at $65.98 per barrel, compared to its prior session close of $65.66.
As global concerns over inflation and recession persist, the trade war initiated by US President Donald Trump through tariffs is adding uncertainty to the country’s economic outlook. Trump’s comments on tariffs last week further fueled recession fears.
In an interview on Sunday, he did not rule out the possibility that tariffs could push the US economy into recession or drive up inflation this year.
Asked whether a recession was expected due to tariffs, Trump said he ‘hates’ making predictions, adding: ‘There is a period of transition, because what we’re doing is very big. We’re bringing wealth back to America. That’s a big thing. And there are always periods of — it takes a little time. It takes a little time. But I think it should be great for us.’
Regarding inflation concerns, Trump acknowledged tariffs could have an impact but emphasized that interest rates have also fallen.
‘Trump’s comments triggered a wave of selling as investors started pricing in the risk of weaker growth in demand,’ Daniel Hynes, a commodity strategist at the Australia and New Zealand Banking Group, said in an e-mail note.
‘Sentiment wasn’t helped by data in China that showed consumer inflation fell more than expected. The decline in services prices and a negative reading for core inflation were symptoms of sluggish consumption,’ he added.
As market sentiment continues to be shaped by Trump’s tariff policy, a 25% tariff on all steel and aluminum imports is set to take effect on March 12.
Meanwhile, Doug Ford, premier of Ontario, Canada’s most populous province, announced that in response to Washington’s tariffs, they will impose a 25% surcharge on electricity supplied to US states.
On the supply side, as the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, prepare to increase oil output from April, Russian Deputy Prime Minister Alexander Novak said Friday that they are ready to adjust their approach if market imbalances emerge.
Experts caution that slowing demand and increasing supply could have a significant effect on oil prices in the months ahead.
By Firdevs Yuksel
