Oil prices steadied in Asian trade on Wednesday after industry data showed a slightly smaller-than-expected build in U.S. inventories, although caution over trade tariffs and a Federal Reserve meeting persisted.
Crude prices were nursing some losses this week as traders fretted over weak Chinese economic data, as well as concerns that U.S. President Donald Trump’s plans for trade tariffs will stymie oil demand.
Oil was also pressured by Trump planning for increased energy production in the U.S., while the President also called on the Organization of Petroleum Exporting Countries to increase production and bring down oil prices.
Brent oil futures expiring in March steadied at $77.47 a barrel, while West Texas Intermediate crude futures were flat at $73.81 a barrel by 20:31 ET (01:31 GMT).
US inventories see smaller-than-expected build- API
Data from the American Petroleum Institute showed on Tuesday that U.S. oil inventories grew by 2.86 million barrels in the week to January 24, less than expectations for a build of 3.7 mb.
The API data usually heralds a similar reading from official inventory data, which is due later on Wednesday.
U.S. inventories saw nine straight weeks of draws, as cold weather pushed up demand for heating, while travel demand also increased during the year-end holidays.
While demand has remained steady in the world’s largest fuel consumer, traders are bracing for increased oil production under Trump, who had last week declared a national energy emergency to ramp up output.
Trump tariffs, Fed meeting in focus
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The White House on Tuesday reiterated Trump’s threat of imposing trade tariffs against Canada, China, and Mexico by February 1, which is this Saturday.
Trump threatened a 25% duty on imports from Mexico and Canada, and a 10% duty against China.
Tariffs against China are a particular point of concern for oil markets, given that they herald more economic pressure on the world’s biggest oil importer.
Chinese markets are closed for the week-long Lunar New Year holiday. But just before the holiday, purchasing managers index data released on Monday showed sustained weakness in Chinese business activity.
Beyond Trump’s tariffs, focus is also on the conclusion of a Federal Reserve meeting on Wednesday, where the central bank is widely expected to keep interest rates steady and strike a hawkish chord.
The dollar was upbeat in anticipation of the Fed meeting, pressuring crude markets.
