Oil prices rebound in the global commodities market amidst demand concerns, spooked by lingering tariff risks and falling consumer confidence. Brent climbs slightly to $72.65 per barrel after huge price decline yesterday. The US benchmark West Texas Intermediate (WTI) increased by a basis points, reaching $69.02 per barrel, compared to its prior session close of $69.01.

On Tuesday, Brent fell by 2.35%, while WTI is trading back below $70 per barrel yesterday following a spike in US stockpiles. The American Petroleum Institute (API) reported that US commercial crude oil stocks fell by 640,000 barrels last week compared to the previous week.

Market expectations were that stocks would increase by 2.3 million barrels. Contrary to expectations, the decrease in stocks signaled that demand in the US was strengthening, affecting oil prices upwards.

The US Energy Information Administration (EIA) is expected to release its official stock data during the day. In addition, US President Donald Trump’s comments on tariffs on Canada and Mexico at a press conference with French President Macron at the White House yesterday also supported prices.

Upon being asked whether the delayed tariffs on Canada and Mexico would be implemented at the meeting, Trump’s response that ‘The tariffs are going forward on time, on schedule,’ strengthened market players’ expectations that there would be a problem in global oil supply.

Trump imposed 25% tariffs on imports from Canada and Mexico and 10% tariffs on imports from China with the decree he signed on February 1, and announced on February 3 that the tariffs imposed on Canada and Mexico were suspended for 30 days in exchange for increasing border security.

In addition, uncertainties regarding the road map to be followed by the US Federal Reserve (Fed) in the coming period continue to have an impact on oil prices.

Experts believe that the Fed may resume interest rate cuts in June, as consumer confidence data in the US came in below expectations this month and concerns about accelerating inflation have increased.

Low interest rates are expected to cause the US dollar to depreciate against other currencies, increasing oil demand and affecting prices upwards. In addition, prospects for a peace deal between Russia and Ukraine are improving as the US and Ukraine agree on a minerals deal.

“It could be signed later this week. This would take us a step closer to Russian sanctions being lifted, removing much of the supply uncertainty hanging over the market”, ING said.