Oil futures experienced a decline on Wednesday morning as a result of expected increases in crude oil supplies and uncertainties surrounding US tariffs. May Brent oil futures were at $70.75, down by 0.41 per cent, while April WTI crude oil futures were at $67.61, down by 0.95 per cent. On the Multi Commodity Exchange (MCX), March crude oil futures were trading at ₹5,906, a decrease of 0.91 per cent from the previous close, while April futures were trading at ₹5,893, down by 0.87 per cent.
The recent OPEC+ meeting decided to gradually increase crude oil supply starting on April 1, with the flexibility to adjust based on market conditions. However, uncertainties surrounding US tariffs on Canada, Mexico, and China are causing concerns about potential impacts on crude oil supply and global economic growth.
According to Warren Patterson, Head of Commodities Strategy, and Ewa Manthey, Commodities Strategist, the oil market faced pressure on Tuesday due to the uncertainty surrounding tariffs, with ICE Brent settling lower and WTI trading lower on Wednesday. The Trump administration considering tariff relief on imports from Canada and Mexico added to the market’s uncertainty.
The US administration has given Chevron until April 3 to wind down its operations in Venezuela, which could result in a loss of 200,000 barrels per day of supply. This, combined with tariffs on other suppliers like Canada and Mexico, is causing disruptions in the crude oil market.
The American Petroleum Institute reported a 1.5 million barrel decrease in US crude oil inventories, along with a decline in gasoline stocks and an increase in distillate inventories. Despite this, the market remains focused on tariff implications.
In addition to crude oil, natural gas and other commodities were also affected. March natural gas futures on MCX were trading lower, while March guargum and jeera futures on NCDEX were experiencing fluctuations.
Overall, the impact of anticipated OPEC supply increases and US tariff decisions are contributing to fluctuations in crude oil prices and market uncertainty.
