Oil prices edged up on Wednesday, buoyed by a weaker dollar, but mounting fears of a U.S. economic slowdown and the impact of tariffs on global economic growth capped gains.
Brent futures rose 51 cents, or 0.7%, to $70.07 a barrel at 0430 GMT, while U.S. West Texas Intermediate crude futures gained 52 cents, or 0.8%, to $66.77 a barrel.
Despite the weakening economic outlook, oil held steady in a positive position, said Daniel Hynes, senior commodity strategist at ANZ. “That’s a sign that near-term demand for crude remains strong.”
The dollar index, which fell 0.5% to fresh 2025 lows on Tuesday, boosted oil prices by making crude less expensive for buyers holding other currencies.
“Easing dollar counters the bearish bias of global economic slowdown, although this seems short-lived,” said Priyanka Sachdeva, senior market analyst at Phillip Nova.
U.S. stock prices, which also influence the oil market, fell again on Tuesday, adding to the biggest selloff in months, with investors rattled over increased tariffs on imports and souring consumer sentiment.
“Overall sentiment remains fragile despite a slight bounce in today’s session,” said Yeap Jun Rong, market strategist at IG.
“For now, oil market sentiments are likely to stay contained, with tariff developments still lacking clarity and persistent concerns over U.S. growth risks,” Yeap added.
U.S. President Donald Trump’s protectionist policies have shaken global markets. He has imposed, then delayed tariffs on major oil suppliers Canada and Mexico, while also raising duties on China, prompting retaliatory measures.
Over the weekend, Trump said a “period of transition” was likely and declined to rule out a U.S. recession.
In supply, U.S. crude oil production is poised to set a larger record this year than prior estimates, at an average 13.61 million barrels per day, the U.S. Energy Information Administration said on Tuesday.
Investors are waiting for U.S. inflation data due on Wednesday for clues on the path of interest rates. They also are closely monitoring OPEC+ plans. The producer group has announced plans to increase output in April.
In the U.S., crude oil stockpiles rose by 4.2 million barrels in the week ended March 7, market sources said, citing American Petroleum Institute figures on Tuesday.
Markets now await government data on U.S. stockpiles due on Wednesday for further trading cues.
(Reporting by Nicole Jao in New York and Jeslyn Lerh in Singapore; Editing by Himani Sarkar and Jamie Freed)