Oil prices rebounded in Asian trading on Thursday after hitting multi-year lows, driven by U.S. tariff concessions that lifted market sentiment. Brent crude futures for May rose 0.5% to $69.66 per barrel, while West Texas Intermediate (WTI) crude gained 0.5% to $66.25. Despite this recovery, concerns over rising oil supply and trade tensions kept investors cautious.
The Organization of Petroleum Exporting Countries and its allies (OPEC+) recently agreed to increase production, raising fears of an oversupplied market. Additionally, a larger-than-expected build in U.S. oil inventories signaled weakening demand, pushing WTI to a near one-year low and Brent to its lowest level since December 2021.
Markets found relief as U.S. President Donald Trump offered tariff exemptions for automakers, allowing a one-month adjustment period for recent 25% levies on Mexico and Canada. Reports also suggested Trump was considering exemptions on agricultural goods like potash and fertilizers. Investors hoped these concessions indicated a possible scaling back of trade restrictions, easing economic concerns.
However, Trump maintained that more tariffs, including reciprocal measures, would take effect in early April, keeping markets on edge. Meanwhile, Mexico’s state-owned oil company, Pemex, sought alternative buyers in Asia and Europe, including China, to offset reduced exports to the U.S. following the tariff announcement. The company, which previously exported over half of its production to the U.S., ruled out offering discounts to American buyers.
Despite temporary relief from U.S. tariff concessions, the oil market remains volatile, with investors closely watching trade policies, inventory levels, and global economic conditions.