Oil prices extended gains on Tuesday after a report showed Russian oil production fell short of quota and on fears of more supply disruptions, but gains were limited by worries that escalating trade tariffs could dampen global economic growth.
Brent crude futures were up 24 cents, or 0.32%, at $76.11 a barrel by 0447 GMT, while U.S. West Texas Intermediate crude rose 19 cents or 0.26% to $72.51.
Both contracts posted gains of near 2% in the prior session after three weekly losses in a row.
The rebound came on signs of tightening supplies, said ANZ analysts in a research note.
“Russian oil production fell short of its OPEC+ quota in January, easing concerns of an oversupply. Output fell to 8.962 million barrels per day (bpd) and is 16,000 bpd below its approved levels under the production agreement,” they wrote.
The analysts added that concerns of further disruptions were heightened following a Politico report on Monday that European countries plan to seize Russia’s shadow fleet.
Shipping of Russian oil to China and India, the world’s major crude oil importers, has been significantly disrupted by U.S. sanctions last month targeting tankers, producers and insurers.
Adding to supply jitters are U.S. sanctions on networks shipping Iranian oil to China after Donald Trump restored his “maximum pressure” on Iranian oil exports last week.
But countering the price gains was the latest tariff by Trump which could dampen global growth and energy demand.
Trump on Monday substantially raised tariffs on steel and aluminium imports to the U.S. to 25% “without exceptions or exemptions” to aid the struggling industries that could increase the risk of a multi-front trade war.
The tariff will hit millions of tons of steel and aluminium imports from Canada, Brazil, Mexico, South Korea and other countries.
Trump last week introduced 10% additional tariffs on China, for which Beijing retaliated with its own levies on some U.S. imports, including a 10% duty on crude.
Also weighing on crude demand, the U.S. Federal Reserve will wait until next quarter before cutting rates again, according to a majority of economists in a Reuters poll who previously expected a March cut.
The Fed faces the threat of rising inflation under Trump’s policies. Keeping rates at a higher level could limit economic growth, which would impact oil demand growth.
U.S. crude oil and gasoline stockpiles were expected to have risen last week, while distillate inventories likely fell, a preliminary Reuters poll showed on Monday.
The poll was conducted ahead of weekly reports from industry group, the American Petroleum Institute, due at 4:30 p.m. ET (2130 GMT) on Tuesday and an Energy Information Administration report due on Wednesday.
(Reporting by Siyi Liu in Singapore and Georgina McCartney in Houston; Editing by Christian Schmollinger and Kim Coghill)