Oil prices fell slightly in Asian trade on Thursday, cooling after a rebound from recent lows although sentiment remained strained amid concerns over a U.S. recession and high production.
Crude prices bounced back from over three-year lows this week, aided by some improving sentiment following a soft reading on U.S. inflation, along with a weaker dollar. Data showing a substantially bigger-than-expected draw in U.S. gasoline inventories also helped soothe some concerns over slowing demand.
But oil was still nursing steep losses so far in 2025, as traders fretted over softening demand in major economies amid a brewing U.S.-led trade war. Signs of increasing supply in the U.S. and abroad also weighed.
Brent oil futures expiring in May fell 0.2% to $70.83 a barrel, while West Texas Intermediate crude futures fell 0.2% to $67.24 a barrel by 21:32 ET (01:32 GMT).
OPEC+ flags higher production despite oversupply concerns
The Organization of Petroleum Exporting Countries and allies (OPEC+) said in a monthly report on Wednesday that its oil production rose by 363,000 barrels per day to 41.01 million bpd in February, as the cartel begins phasing out nearly two years of production cuts.
February’s rise was led by Kazakhstan, and comes as the group prepares to increase production even further in April.
But the OPEC’s plans for higher production have fueled increased concerns that oil markets will be flush with supply, even as a cooling global economy could potentially bring down demand.
But the cartel maintained its outlook for demand growth- of 1.45 million bpd in 2025- unchanged from the prior month, stating that it expects the global economy to take increased trade tariffs in its stride.
The OPEC report came just after U.S. President Donald Trump imposed steep tariffs on steel and aluminum imports, and warned of more tariffs in the coming weeks.
Oil markets digest softer inflation, recession concerns
Oil took some relief from a mildly softer-than-expected U.S. consumer price index reading for February, which weighed on the dollar.
But the reading did little to ease concerns over a potential U.S. recession, especially amid heightened uncertainty over President Trump’s trade policies.
Trump’s hawkish stance on China- the world’s biggest oil importer- has also sparked concerns that more economic headwinds for the country will hurt its appetite for crude.
U.S. producer price index inflation is due later on Thursday and is expected to provide more cues on the world’s biggest fuel consumer.
Source: Investing