Crude oil prices stabilized today, following Monday’s dip, and even made some gains earlier in the day, as traders rushed to cover their short positions on the commodity, and production figures from OPEC+ showed a decline for March, to the tune of 360,000 barrels daily.
At the time of writing, Brent crude was trading at $66.59 per barrel, with West Texas Intermediate at $63.73, both up from Monday’s close.
Meanwhile, President Trump has gone on the offensive against Federal Reserve chair Jerome Powell, insisting that the central bank cut interest rates, otherwise there is a danger of the U.S. economy slowing. The move prompted a selloff in U.S. stocks, debt, and dollars, Bloomberg reported. ING noted Trump’s pressure on Powell had raised doubts about the central bank’s independence, which had in turn affected sentiment towards the U.S. economy.
“Some short-covering emerged after Monday’s sharp sell-off,” Hiroyuki Kikukawa, chief strategist of Nissan Securities Investment, told Reuters. “However, concerns about a potential recession driven by the tariff war persist,” Kikukawa added.
Tariff fears are indeed still running high, with expectations overwhelmingly gloomy. The latest commodity import update from China did not help change that. Per the fresh figures, China did not import any U.S. liquefied natural gas last month, imports of U.S. liquefied petroleum gas dropped by 36% and coal imports declined by 62% in the first real-life evidence of the impact tariffs are having on bilateral trade.
“While the flat [oil] price has come under renewed pressure, the prompt timespread has strengthened,” ING analysts wrote in a note. “It’s trading close to US$1/bbl backwardation. This suggests that the spot market is still relatively tight. In addition, refinery margins have been relatively well supported despite growing demand concerns.” On the other hand, the analysts reiterated their expectation of an oversupplied market this year.
NB: By Irina Slav for Oilprice.com
