Oil Updates - crude edges lower as market awaits fresh US tariffs

03/04/2025 02:43 AST

Oil prices were little changed on Wednesday as traders remained cautious ahead of US tariffs due to be announced at 11:00 p.m. Saudi time, fearing they could exacerbate a global trade war and dampen demand for crude.

Brent futures were down 30 cents, or 0.40 percent, at $74.19 a barrel by 2:48 p.m. Saudi time. US West Texas Intermediate crude futures fell 26 cents, or 0.37 percent, to $70.94.

Prices settled at their highest in five weeks on Monday.

The White House confirmed on Tuesday that President Donald Trump will impose new tariffs on Wednesday, though it provided no details about the size and scope of the trade barriers.

"Crude prices have paused last month's rally, with Brent finding some resistance above $75, with the focus for now turning from a sanctions-led reduction in supply to Trump's tariff announcement and its potential negative impact on growth and demand," said Ole Hansen, head of commodity strategy at Saxo Bank.

Traders will be watching for levies on crude imports, potentially driving up prices of refined products, he added.

For weeks, Trump has touted April 2 as "Liberation Day," which would bring new duties that could rattle the global trade system.

"The balance of risk lies to the downside, given that weaker than expected tariff measures are unlikely to drive a significant rally in Brent, while stronger than expected measures could trigger a substantial selloff," BMI analysts said in a note.

Trump has also threatened to impose secondary tariffs on Russian oil and on Monday he ramped up sanctions on Iran as part of his administration's "maximum pressure" campaign to cut its exports.

"Markets likely to be volatile ahead of the final announcements on tariffs and the scale of them. The threat of secondary tariffs on Russian crude continues to provide some support for prices, with more downside risk at present around tariff uncertainty," said Panmure Liberum analyst Ashley Kelty.

US oil and fuel inventories painted a mixed picture of supply and demand in the world's biggest producer and consumer.

US crude oil inventories rose by 6 million barrels in the week ended March 28, according to sources citing the American Petroleum Institute. Gasoline inventories, however, fell by 1.6 million barrels and distillate stocks were down by 11,000 barrels, the sources said.

Official US crude oil inventory data from the Energy Information Administration is due later on Wednesday.