Oil prices rose on Thursday after a U.S. trade court denied most of the tariffs the Trump administration had put in place. The move allayed fears over the global economy and lifted expectations for oil demand. Brent crude added 1.6% to $65.93 a barrel by midday, and U.S. West Texas Intermediate (WTI) crude jumped 1.7% to $62.90 a barrel.
The court held that the expansive tariffs on imports from multiple trading partners of the United States were beyond the president's authority. This is a positive development for world trade as well as economic growth, which supports stronger fuel demand. But the ruling may be appealed, leaving some uncertainty.
The oil market is also monitoring possible new United States sanctions that would restrict Russian crude exports. The sanctions could curtail supply and drive up prices. While OPEC and its allies, known as OPEC+, are expected to meet later this week and debate raising oil production. Sources predict an increase of approximately 411,000 barrels per day as demand increases.
Supply fears rose after Chevron halted its oil extraction in Venezuela following the expiration of a major operating license earlier this year. Before the shutdown, Chevron's production eclipsed 290,000 barrels per day, or a third of Venezuela's total output.
Analysts expect global demand for oil liquids to exceed supply by between 600,000 and 700,000 barrels a day each month between May and August. That imbalance suggests an oil-price bull market during the travel- and industry-heavy summer season.
Complicating supply matters are the wildfires in Alberta, Canada, which have forced evacuations and temporary shutdowns of some oil and gas operations. These disruptions cut crude supplies and place additional upward pressure on prices."
Investors are paying close attention to weekly U.S. inventory figures to inform what they think about crude and fuel stock levels. Preliminary estimates indicate that U.S. crude and gasoline stockpiles fell last week, potentially aiding additional price gains.
