Crude oil prices held steady on Tuesday after falling sharply at the start of the week. The market also saw early gains as traders moved quickly to cover short positions. New data from OPEC+ showed a drop in production for March, with output falling by 360,000 barrels per day.
By midday, Brent crude was priced at $66.59 a barrel, while West Texas Intermediate traded at $63.73. Both benchmarks had risen from Monday’s closing prices.
The oil market‘s rebound came amid broader economic concerns in the U.S. President Donald Trump increased pressure on Federal Reserve Chair Jerome Powell, demanding interest rate cuts. He warned that the U.S. economy could slow down without such action. This sparked a selloff in U.S. stocks, bonds, and the dollar, according to Bloomberg.
Analysts at ING said Trump’s remarks raised questions about the independence of the Federal Reserve, leading to weaker investor confidence in the U.S. economy.
“Some short-covering emerged after Monday’s sharp sell-off,” said Hiroyuki Kikukawa, chief strategist at Nissan Securities, speaking to Reuters. Still, Kikukawa warned that fears of a recession due to ongoing trade tensions remain strong.
Concerns about tariffs continued to weigh on market sentiment. China’s latest import data provided fresh evidence of trade damage. The country reported no imports of U.S. liquefied natural gas last month. Imports of U.S. liquefied petroleum gas fell by 36%, while coal imports plunged 62%.
ING analysts noted that while oil prices are facing renewed pressure, the prompt timespread has improved, nearing a $1 per barrel backwardation. This suggests current supply is still tight. They also pointed out that refinery margins remain solid despite worries about demand.
However, ING still expects an oversupplied oil market later this year.
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