TOKYO (Reuters) – Oil prices experienced a slight decline on Thursday, following a surge the previous day, as growing concerns over the potential repercussions of escalating global tariff wars on economic growth and energy demand overshadowed the positive market response to a significant drop in U.S. gasoline inventories.
Brent crude futures edged lower by 7 cents, or 0.1%, to $70.88 per barrel as of 0107 GMT, while U.S. West Texas Intermediate (WTI) futures dropped by 11 cents, or 0.2%, to $67.57 per barrel.
Both benchmarks had risen by nearly 2% on Wednesday, buoyed by U.S. government data revealing unexpectedly tight oil and fuel inventories. According to the U.S. Energy Information Administration (EIA), crude stockpiles increased by 1.4 million barrels in the latest reporting week, a smaller rise than the 2 million barrels that analysts had predicted.
More notably, U.S. gasoline inventories fell by 5.7 million barrels, surpassing the 1.9 million-barrel decrease forecasted by experts. Similarly, distillate stocks also saw a larger-than-expected drop. Furthermore, the EIA’s report revealed that crude inventories in the U.S. Strategic Petroleum Reserve (SPR) had reached their highest level since 2022.
“While the reduction in U.S. gasoline inventories has raised hopes for an increase in seasonal demand during the spring, broader concerns over the economic fallout from ongoing tariff disputes are casting a shadow over the market,” explained Hiroyuki Kikukawa, Chief Strategist at Nissan Securities Investment.
Kikukawa added that the market is caught between these opposing forces, making it difficult to discern a clear direction.
The situation has been further complicated by U.S. President Donald Trump’s recent threat to impose additional tariffs on European Union goods. This move has prompted retaliatory warnings from major U.S. trading partners, stoking fears of a prolonged trade war. Investors, consumers, and businesses are increasingly concerned, with mounting anxiety over a potential U.S. recession.
Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) reported that Kazakhstan led a significant rise in crude output within the OPEC+ group in February, underscoring the challenges the group faces in maintaining compliance with agreed-upon production targets. OPEC’s monthly report revealed that the combined output of OPEC+—which includes OPEC members, Russia, and other allies—rose by 363,000 barrels per day in February, reaching a total of 41.01 million barrels per day.
Despite these concerns, OPEC maintained its forecast for strong global oil demand growth in 2025. “Although trade tensions are expected to contribute to market volatility as new policies unfold, the global economy is expected to adjust over time,” OPEC stated.
In conclusion, while the oil market is influenced by both tightening supply factors and mounting economic uncertainties, the complex interplay of these dynamics is leaving traders cautious and uncertain about future price movements.
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