Oil Market Rises as US Dollar Weakens Amid Tariff Fears

Brent crude futures gained 28 cents or 0.4 per cent to close at $69.56 a barrel, and the US West Texas Intermediate (WTI) crude futures increased by 22 cents or 0.3 per cent to $66.25 a barrel.

The Dollar Index, which measures the American currency against six other top currencies, hit a four-month low. making oil less expensive for overseas buyers, buoying prices.

However, the market is still in the shadow of tariffs after the US President, Mr Donald Trump, said on Tuesday he had instructed his commerce secretary to add an additional 25 per cent tariff on all steel and aluminum imports from Canada, bringing the total tariff on those products to 50 per cent.

Market analysts noted that President Trump’s protectionist policies have shaken global markets following imposing and delaying tariffs on major oil suppliers Canada and Mexico, while also raising duties on China, prompting retaliatory measures.

He said over the weekend that the world’s largest economy could see a period of transition and declined to rule out a recession.

In supply, the US Energy Information Administration said on Tuesday that US crude oil production is poised to set a larger record this year than prior estimates, at an average 13.61 million barrels per day.

Worries about supply comes as the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) plans to increase output in April.

Last Friday, Russia’s Deputy Prime Minister Alexander Novak told reporters that the OPEC+ producer group would go ahead with its April increase but may then consider other steps, including reducing production.

The decision could see the alliance add about 138,000 barrels per day of crude oil in April, which is the beginning of the easing of 2.2 million barrels per day cuts.

Investors are waiting for US inflation data due on Wednesday for clues on the path of interest rates.