Oil prices steadied in thin trading on Wednesday after falling in the previous session on concerns that new US tariffs, set to be unveiled at 2000 GMT, may deepen a global trade war that could limit crude demand.
Brent futures were unchanged at $74.49 a barrel by 0622 GMT after slipping 0.4% on Tuesday. US West Texas Intermediate crude futures rose 3 cents to $71.23 after dropping 0.4%. Prices settled at their highest in five weeks on Monday.
The White House confirmed on Tuesday that President Donald Trump will impose new tariffs on Wednesday, though it provided no details about the size and scope of the trade barriers. “Oil prices increased nearly 2% in March but have remained steady since as markets await clarity on Trump’s universal tariff plans ahead of ‘Liberation Day.’
The thin trading volumes in the oil market indicate rising concerns about these tariffs, despite some positive demand signals from mainland China,“ said Phillip Nova’s senior market analyst Priyanka Sachdeva.
At 0623 GMT, Brent trading volumes were at 13,936 lots for June, compared with 672,617 lots of open interest for the same month, ICE data on the LSEG pricing platform showed.
For weeks, Trump has touted April 2 as “Liberation Day,” which would bring new duties that could rattle the global trade system.
The White House announcement is scheduled for 4 p.m. ET (2000 GMT).
“The (tariff) announcement could impact prices either to the upside or the down, although the balance of risk lies to the downside, given that weaker-than-expected tariff measures are unlikely to drive a significant rally in Brent, while stronger-than-expected measures could trigger a substantial selloff,” BMI analysts said in a note.
The declines were offset by threats by Trump to impose secondary tariffs on Russian oil, and as he ramped up sanctions on Iran on Monday as part of his administration’s “maximum pressure” campaign to cut its exports.
“Should the tariff pressures prove successful for Trump and enable a Russia-Ukraine ceasefire, there is a scenario where these punitive measures could be short-lived, with tariffs potentially bullish for crude oil and bearish for products,” said Rystad Energy’s vice president of commodity markets, Janiv Shah.
“So far, oil prices have remained muted, awaiting an official reaction from major importing nations on the newly proposed tariffs.”
US oil and fuel inventories painted a mixed picture about supply and demand in the world’s biggest producer and consumer. US crude oil inventories rose by 6 million barrels in the week ended March 28, according to sources, citing the American Petroleum Institute.
Gasoline inventories, however, fell by 1.6 million barrels and distillate stocks fell by 11,000 barrels, the sources said.
Official US crude oil inventory data from the Energy Information Administration are due later on Wednesday.