Oil Jumps 2% Amid Tight Supply, Tariff Worries

The price of Brent went up by $1.39 or 2 per cent to $70.95 a barrel and the US West Texas Intermediate (WTI) crude gained $1.43 or 2.2 per cent to close at $67.68 a barrel.

Crude oil inventories in the US saw an increase of 1.4 million barrels during the week ending March 7, according to new data from the US Energy Information Administration released on Wednesday.

However, US gasoline inventories fell by 5.7 million barrels, versus expectations for a 1.9 million-barrel draw, while distillate stocks also dropped by more than expected.

Crude oil prices were trading up prior to the crude data release by the EIA rebounding from a slide earlier in the week, even after the American Petroleum Institute (API) reported on Tuesday a build of 4.247 million barrels in US crude oil inventories amid strong product draws.

However, investors kept an eye on mounting fears of a US economic slowdown and the impact of tariffs on global economic growth.

President Donald Trump further threatened on Wednesday to escalate a global trade war with further tariffs on European Union (EU) goods.

This is as major US trading partners said they would retaliate for trade barriers already erected by the American president.

This development occurs after President Trump’s 25 per cent duties on all US steel and aluminum imports took effect.

The US President had said he would impose additional penalties if the EU follows through with its plan to enact counter tariffs on some US goods from April.

Market analysts noted that President Trump’s hyper-focus on tariffs has rattled investor, consumer, and business confidence and raised recession fears.

The American president has imposed and then delayed tariffs on the country’s biggest oil suppliers,Canada and Mexico, while also raising duties on Chinese goods.

Support also came as the US Dollar hovered near a five-month low against other major currencies.

The Dollar index fell 0.5 per cent to fresh 2025 lows on Tuesday, boosting oil prices by making crude less expensive for buyers holding other currencies.

The Organisation of the Petroleum Exporting Countries and its allies (OPEC+) have agreed to start increasing oil production from April but could reverse the decision afterwards if there are market imbalances.