Oil prices saw modest gains on Wednesday, supported by a weaker U.S. dollar, but lingering fears of a U.S. economic slowdown and the impact of global trade tariffs kept a lid on further advances.
At 10:51 am Nigerian time, Brent crude oil rose 37 cents or 0.53% to $69.93 per barrel while U.S. West Texas Intermediate (WTI) crude gained 37 cents, or 0.53% to $66.62 per barrel.
The slight rebound comes as the dollar index extended its decline to 2025 lows on Tuesday, making crude oil more affordable for holders of other currencies.
Analysts note that currency fluctuations continue to play a crucial role in short-term price movements.
“Easing dollar counters the bearish bias of global economic slowdown, although this seems short-lived,” said Priyanka Sachdeva, senior market analyst at Phillip Nova.
Despite the support from currency movements, concerns over slowing economic growth in the United States have weighed on investor sentiment. U.S. stock markets fell sharply on Tuesday as investors reacted to increasing tariffs on imports, weaker consumer sentiment, and recession fears.
“Fears of a U.S. recession, weakness in stock markets, and concerns over tariffs affecting key oil consumers such as China have introduced additional market uncertainty. These factors could continue to fuel a bearish sentiment, limiting oil price gains,” said Hassan Fawaz, Chairman and Founder of brokerage GivTrade.
Investors are closely watching the U.S. inflation report due Wednesday, which could provide further insights into interest rate adjustments by the Federal Reserve. Any indication of continued economic strain could further impact crude demand expectations.
Meanwhile, on the supply front, the U.S. Energy Information Administration (EIA) has revised its forecasts, moving away from earlier projections of an oversupplied oil market in 2025. However, crude oil stockpiles in the U.S. rose by 4.2 million barrels in the week ending March 7, while gasoline inventories declined by 4.6 million barrels, according to estimates from the American Petroleum Institute (API).
Market participants now await official U.S. government stockpile data, expected later Wednesday, for further trading cues.
The OPEC+ alliance is set to increase output in April, but some analysts believe that global supply growth is already outpacing demand, adding further pressure to the market outlook.
“Overall sentiment remains fragile despite a slight bounce in today’s session,” said Yeap Jun Rong, market strategist at IG. “For now, oil market sentiment is likely to remain contained, with tariff developments still lacking clarity and persistent concerns over U.S. growth risks.”
As uncertainty over global economic conditions and trade policies persists, crude oil markets remain volatile, with price movements largely dictated by macroeconomic trends and supply-side expectations.
