- Oil prices rose by 0.53%, with Brent crude reaching $69.93 a barrel and U.S. West Texas Intermediate (WTI) at $66.62 a barrel, supported by a weaker dollar.
- Fears of a U.S. recession and the impact of tariffs on global trade continue to create market uncertainty, limiting further price increases.
Oil prices increased on Wednesday, March 12, supported by a weaker U.S. dollar. However, the gains were limited due to growing concerns about a U.S. economic slowdown and the impact of tariffs on global economic growth.
Brent crude futures rose by 37 cents, or 0.53%, reaching $69.93 per barrel at 0951 GMT. U.S. West Texas Intermediate crude futures also gained 37 cents, or 0.53%, to $66.62 per barrel.
Recent support for crude prices has come from a weaker U.S. dollar. This made crude oil less expensive for buyers holding other currencies. The Energy Information Administration (EIA) also shifted away from earlier predictions of a heavily oversupplied oil market this year.
Giovanni Staunovo, an analyst at UBS, noted that the dollar’s decline helped boost oil prices. On Tuesday, March 11, the dollar index fell 0.5% to new 2025 lows, strengthening oil prices.
Priyanka Sachdeva, a senior market analyst at Phillip Nova, explained, “Easing dollar counters the bearish bias of global economic slowdown, although this seems short-lived.”
The oil market has also been affected by fears of a potential U.S. recession. U.S. stock prices fell sharply on Tuesday, adding to a selloff that was already one of the largest in months. Investors were worried about the impact of rising tariffs on imports and weakening consumer sentiment.
Hassan Fawaz, chairman of brokerage GivTrade, said, “Fears of a U.S. recession, weakness in U.S. stock markets, and concerns over tariffs affecting key oil players such as China, introduced additional market uncertainty. These factors could continue to fuel a bearish sentiment, putting a lid on oil prices.”
U.S. President Donald Trump’s economic policies have focused heavily on tariffs; some have already taken effect, while others are delayed or set to start later. Markets are concerned that tariffs could raise prices for businesses, push inflation, and hurt consumer confidence, which could slow economic growth.
Over the weekend, Trump suggested a “period of transition” and did not rule out a U.S. recession. Investors are now waiting for U.S. inflation data, due Wednesday, to get clues on interest rates. They are also closely watching plans from OPEC+, which has announced plans to increase output in April.
Despite the slight bounce in oil prices, overall sentiment remains fragile. Yeap Jun Rong, a market strategist at IG, said, “Overall sentiment remains fragile despite a slight bounce in today’s session.” He added that oil market sentiments will likely stay contained, with tariff developments still unclear and persistent concerns about U.S. economic risks.
On the supply side, U.S. crude oil production is expected to reach a higher record than previously estimated. The U.S. Energy Information Administration forecasted that production would average 13.61 million barrels per day this year.
Meanwhile, according to the American Petroleum Institute, U.S. crude oil stockpiles rose by 4.2 million barrels by March 7, while gasoline inventories fell by 4.6 million barrels. Markets are awaiting government data on U.S. stockpiles, which is due on Wednesday, March 12, for further trading signals.