Oil Prices Fluctuate Amid Uncertain U.S. Tariff Policies, API Data Shows 1.7M Barrel Increase

Brent crude oil prices fluctuated around the $70 per barrel mark during early trading, with West Texas Intermediate (WTI) crude oil also rising by 0.5% to $68.68 per barrel. However, the market outlook remains uncertain due to the unpredictable tariff policies of the U.S. President, which continue to weigh on demand prospects. The fluctuating nature of these policies has created uncertainty, making it difficult for market participants to gauge the potential impact on global oil demand. This uncertainty has led to a cautious approach among investors, who are wary of making significant moves until there is more clarity on the direction of U.S. trade policy.

The recent announcement of a 50% tariff on copper and the insistence on new deadlines for trade agreements have further exacerbated market volatility. Investors are concerned that a full-scale tariff war could slow global economic growth, thereby reducing demand for oil. Despite the U.S. President's strong rhetoric, the market appears to be gradually adapting to the trade strategy, awaiting clearer guidance on the direction of policy. The situation is further complicated by the ongoing trade tensions between the U.S. and other major economies, which have the potential to disrupt global supply chains and further dampen demand for oil.

Meanwhile, data from the American Petroleum Institute (API) showed that U.S. crude oil inventories increased by 1.7 million barrels last week. If the U.S. Energy Information Administration (EIA) confirms this data later this week, it would be the largest single-week increase since January. This increase in inventories adds to the bearish sentiment in the market, as it suggests a potential oversupply of oil. However, the market's reaction to this data will depend on the broader economic context and the evolving trade dynamics.

In summary, while Brent crude oil prices have shown some resilience in recent trading sessions, the overall market sentiment remains fragile and subject to sudden shifts based on the latest developments in the trade war. The unpredictable nature of U.S. tariff policies continues to be a significant factor influencing oil demand prospects, and investors are likely to remain cautious until there is more clarity on the direction of trade policy. The situation is further complicated by the potential impact of trade tensions on global supply chains and economic growth, which could have a significant bearing on oil demand in the coming months.