HOUSTON: Global benchmark Brent was down nearly 3% on Wednesday, recovering slightly from a three-year low hit earlier in the session, after US crude oil stockpiles posted a larger-than-expected build, adding a further headwind as investors worried about OPEC+ plans to increase output in April and US tariffs on Canada, China and Mexico.
Brent futures were trading $1.82, or 2.6%, lower at $69.22 a barrel by 12:59 p.m. EST. (1759 GMT). US West Texas Intermediate crude (WTI) fell $2.06, or 3%, to $66.20 a barrel.
Prices pared some losses after hitting multi-year lows earlier in the session - Brent sank to $68.33, its lowest since December 2021, and US crude futures touched $65.22, its lowest since May 2023.
They recovered slightly after the US Commerce Department chief, Howard Lutnick, said Trump would make the final decision on whether to grant any relief to certain industries on Bloomberg TV.
While Lutnick said the 25% tariff levied on Canada and Mexico would remain, the relief under consideration would eliminate the 10% tariff on Canadian energy imports, such as crude oil and gasoline, which comply with the rules of origin under the US-Mexico-Canada Agreement, a source familiar with the discussions said.
US crude stockpiles rose more than expected last week amid seasonal refinery maintenance, while gasoline and distillate inventories fell due to a hike in exports, the Energy Information Administration said.
Crude inventories rose by 3.6 million barrels to 433.8 million barrels in the week, the EIA said, far exceeding analysts’ expectations in a Reuters poll for a 341,000-barrel rise.
Brent fell more than $2 after the data was released.
“The imposition of tariffs on China, Canada and Mexico by the US sparked swift reprisals from each nation that increased concerns over a slowdown in economic growth and the consequent impact on energy demand,” Ashley Kelty, an analyst at Panmure Liberum, said. Canada and China retaliated immediately against Trump’s tariffs on Tuesday, and Mexican President Claudia Sheinbaum said the country would respond, without giving details.