Crude oil futures saw a bounce back from their recent lows following the US announcement of concessions on tariffs. As of 9:56 am on Thursday, May Brent oil futures were up by 0.55 percent at $69.68, while April crude oil futures on WTI were at $66.71, up by 0.60 percent. On Multi Commodity Exchange (MCX), March crude oil futures were trading at ₹5,817, an increase of 1.06 percent from the previous close, and April futures were trading at ₹5,806, up by 1.01 percent from the previous close.
The US revealed that President Donald Trump would exempt automakers from the 25 percent tariffs on Canada and Mexico for one month, as long as they adhere to existing free trade rules. Trump also expressed openness to considering exemptions for other products. A source reported by Reuters mentioned the possibility of eliminating the 10 percent tariff on Canadian energy imports, such as crude oil and gasoline, that comply with current trade agreements.
These developments contributed to the rebound in crude oil prices after Wednesday’s lows. However, the sentiment in the oil market remains negative, with ICE Brent falling by nearly 2.5 percent on Wednesday and settling below $70 a barrel, the lowest level in three years. Factors such as rising OPEC supply, potential tariff uncertainties, and market pressures played a role in pushing prices downward.
Despite the recent price weakness, there are challenges for US producers in increasing drilling activity. While prompt WTI is trading below $67 a barrel, forward values are even weaker, with the calendar 2026 price around $63 a barrel. This reduces the incentives for producers to ramp up drilling operations, and a pullback in activity could be expected.
According to the Dallas Federal Reserve Energy Survey, producers typically require a price level of $64 a barrel to drill a new well profitably. Additionally, the latest weekly petroleum status data from the US Energy Information Administration indicated a rise in crude oil inventories by 3.6 million barrels in the US, with commercial crude oil inventories at 433.8 million barrels, around 4 percent below the five-year average for this time of year.
Motor gasoline inventories decreased by 1.4 million barrels, while total products supplied in the US over the past four weeks showed an increase compared to the same period last year. Despite the challenging market conditions, some commodities showed positive movements in trading, with March aluminium futures and April dhaniya contracts on NCDEX observing price increases, while April jeera futures saw a slight decline.
