Crude has slumped by almost 5% this month as Trump’s aggressive moves on trade stoked investor anxiety at a time when oil traders were already concerned about lackluster consumption in top importer China. Supply issues have also been at the fore, including the possibility of a restart of significant pipeline flows from Iraq’s semi-autonomous Kurdistan region.
The combined headwinds for crude have eclipsed the lift from supportive factors, including fresh sanctions against Iranian flows, as well as expectations that OPEC+ will defer a plan to raise output from April. If so, that would be the fourth time the cartel had pushed a move to restore production.“Tariffs and counter-tariffs have the potential to weigh on the oil-intensive part of the economy, which creates uncertainty over demand,” Morgan Stanley analysts including Martijn Rats said in a note. “We expect OPEC to extend its current quota beyond April, likely keeping production broadly stable.”
Elsewhere, there was a mixed report from the industry-funded American Petroleum Institute on US commercial inventories. While nationwide holdings decreased by 600,000 barrels last week, levels at the key storage hub at Cushing, Oklahoma, were seen rising by a substantial 1.2 million barrels.
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