Oil rises more than 4% after Trump suspends tariffs
What’s happening :- Crude oil prices rose on Wednesday, after recording losses earlier during the session.
What happened :- US President Donald Trump announced a tariff pause on several countries, providing boost to oil prices.
Investors also responded to crude stockpiles data from the Energy Information Administration (EIA).
Oil jumps 3%
Why it matters :- Crude oil had been under pressure due to trade war concerns and the OPEC (Organization of Petroleum Exporting Countries) announcing last week that it plans to raise its output in May, increasing oversupply concerns.
Crude prices received some support from Trump saying on Wednesday that he had agreed to a 90-day pause on several of his new tariffs, effective immediately.
However, the US President did not spare China. He increased tariffs on China’s goods from 104% to 125%, which came into effect on Wednesday, escalating the trade war between the world’s two largest economies.
China also announced plans to implement 84% tariffs on US goods, increasing concerns of a broader slowdown in demand.
Reasons for the rise of oil
Before Trump announced the pause on tariffs, the European Commission had said that it would go ahead with its countermeasures starting April 15 against levies imposes by the US on steel and aluminium.
Meanwhile, data released by the EIA on Wednesday showed that US crude inventories surged by 2.6 million barrels in the week ending April 4, much higher than market expectations of a gain of 1.4 million barrels.
On the other hand, gasoline stockpiles declined by 1.6 million barrels, versus estimates of a decline of 1.7 million barrels. Distillate stockpiles also dipped by 3.544 million barrels, compared to market expectations of a 0.2 million gain.
The 2700-mile Keystone oil pipeline from Canada to the US, which ruptured in North Dakota, remained shut on Wednesday.
Oil prices today
WTI crude oil prices jumped $2.77, or 4.65%, to settle at $62.35 a barrel on Wednesday, after dipping more than 5% earlier during the session. Brent crude, the international benchmark, climbed $2.66, or 4.23%, to close at $65.48 a barrel, after tumbling below the $60 mark in early trading.Oil prices are still down around 13% since the announcement of retaliatory tariffs by Trump on April 2.
What to watch :- Investors await the release of economic data on natural gas stockpiles from the EIA today (1830 UAE Time). US natural gas stockpiles, which rose by 29 billion cubic feet in the week ending March 28, are expected to rise by 60 billion cubic feet in the latest week.Investors will also focus on tariff-related announcements from the US and China