Oil prices experienced a slight recovery during trade on Tuesday, overcoming earlier losses largely due to a weakening U.S. dollar. However, gains remained limited as concerns grew about a potential recession in the United States and the effects of tariffs on global economic growth. Investors are keenly watching the plans of OPEC+, which is set to increase production starting in April, as uncertainties around their strategy linger. At 0936 GMT, Brent crude futures rose by 47 cents, or 0.68%, to reach $69.75 a barrel, while U.S. West Texas Intermediate crude futures gained 42 cents, or 0.64%, climbing to $66.45 after previous drops.
The decline of the dollar index to a four-month low has made oil cheaper for international buyers. Both benchmarks had closed 1.5% lower the previous session. Analyst Tamas Varga from PVM noted that scaling back or eliminating punitive tariffs could alleviate fears of economic contraction and inflation, which would subsequently help stabilize the stock market. However, given the recent drop in prices, implementing OPEC+’s plan to release more oil in April is uncertain.
Russia’s Deputy Prime Minister Alexander Novak recently stated that the OPEC+ producer group would proceed with its planned increase but may reassess production levels afterwards. Suvro Sarkar, from DBS Bank, highlighted that Brent’s price around $70 per barrel serves as a strong support. He suggested that should prices remain below this threshold for an extended period, production hikes may be put on hold. Additionally, OPEC+ will pay close attention to U.S. policies regarding Iran and Venezuela, as trade tensions escalate under President Trump’s administration.
The market nerves were evident as U.S. stock indices tumbled on Monday, with significant drops for major indices like the S&P 500 and Nasdaq. Investors are now awaiting crucial U.S. inflation data to gauge the Central Bank’s interest rate policy. Preliminary polls indicated an expected rise in U.S. crude oil stockpiles, alongside potential decreases in distillate and gasoline inventories, with reports scheduled to be released this week.