Market News

(Bloomberg) -- Oil in New York steadied after sinking back into the $60s as a souring economic outlook threatened prospects for energy demand and spurred investors to shun riskier assets.

West Texas Intermediate futures traded near $69 a barrel, after slumping 2.5% on Tuesday for the lowest close this year. A poor reading of US consumer confidence fanned concerns over the impact of President Donald Trump’s tariffs.

Crude has lost almost 5% this month as Trump’s aggressive moves on trade stoked investor anxiety at a time when oil traders were already concerned about lackluster consumption in China. Supply issues have also been at the fore, including the possibility of a restart of significant pipeline flows from Iraq’s semi-autonomous Kurdistan region, with the US pushing for a resumption.

“Trump actions are hurting consumer and business confidence, which again will weaken actual consumption,” said Bjarne Schieldrop, chief commodities analyst at SEB AB.

The uncertainties over tariffs has eclipsed the lift from fresh sanctions against Iranian flows, as well as expectations that OPEC+ will once again defer a plan to progressively raise output, currently slated to start in April.

“Tariffs and counter-tariffs have the potential to weigh on the oil-intensive part of the economy, which creates uncertainty over demand,” Morgan Stanley analysts including Martijn Rats said in a note. “We expect OPEC to extend its current quota beyond April, likely keeping production broadly stable.”

In the US, there was a mixed report from the industry-funded American Petroleum Institute on commercial inventories. While nationwide stockpiles decreased by 600,000 barrels last week, levels at the key storage hub in Cushing, Oklahoma, were seen rising by a substantial 1.2 million barrels. The government’s numbers are due later on Wednesday.