Oil prices dip as US crude inventories surge, tariff concerns loom
Oil prices fell on Wednesday, following a rise in U.S. crude stockpiles and easing worries over Libyan supply, while focus turned to potential U.S. tariffs on Canadian and Mexican imports.
Brent crude futures were down 59 cents, or 0.76%, to $77.90 a barrel as of 0916 GMT, while U.S. crude futures had lost 55 cents, or 0.75%, at $73.22.
The White House said on Tuesday that U.S. President Donald Trump still plans to issue 25% tariffs on Canada and Mexico on Saturday.
"Crude prices keep dancing to the rhythm of Trump's tariff orchestra, with Canada tariffs going into effect on Saturday potentially lifting U.S. prices then," said Ole Hansen, head of commodity strategy at Saxo Bank.
Canada supplied 3.9 million barrels per day of oil to the U.S. in 2023, roughly half of overall imports for the year, while Mexico supplied 733,000 bpd, according to data from the Energy Information Administration (EIA).
"Overall prices trade a tad softer after Libya said exports have resumed and API reported a weekly increase in U.S. stockpiles. In addition, OPEC+ is expected to stick to their already announced production increase from April," said Hansen.
U.S. crude oil and gasoline stocks rose last week, while distillate inventories fell, market sources said on Tuesday, citing American Petroleum Institute figures.
The EIA, the statistical arm of the U.S. Department of Energy, is due to release its weekly data at 1530 GMT on Wednesday.
Supply concerns eased after Libya's National Oil Corp said on Tuesday export activity was running normally after it held talks with protesters demanding a halt of loadings at one its main oil ports.
The OPEC+ Joint Ministerial Monitoring Committee (JMMC) meeting next Monday, will be another source of ambiguity in the current worryingly unpredictable political and economic environment, said Tamas Varga, analyst with oil broker PVM.
Saudi Arabia's energy minister and several of his OPEC+ counterparts have held talks following Trump's call for lower oil prices and ahead of a meeting next week of OPEC+ oil-producing countries, according to official statements and sources.
"(Trump's) objective is to force Russia, one of the allies of Saudi Arabia and the heavyweight in the OPEC+ group, to the negotiating table to end its hostilities against Ukraine by lowering oil prices via increased production with the side effects being mitigated inflation and lower domestic pump prices, the U.S. thinking goes," said Varga.