Nissan Securities Investment says that worry about the global economic effect of tariff wars is weighing on the market
13 March 2025 - 07:59
byYuka Obayashi and Trixie Yap
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Tokyo/Singapore — Oil prices slipped on Thursday after a surge in the previous session on a larger-than-expected draw in US petrol stocks, as markets weighed macroeconomic concerns against firm near-term demand.
Brent futures fell 5c to $70.9 a barrel by 4.26am GMT, while US West Texas Intermediate (WTI) crude futures shed 10c to $67.58 a barrel.
Both benchmarks rallied about 2% on Wednesday as US government data showed tighter-than-expected oil and fuel inventories.
US petrol inventories fell by 5.7-million barrels, more than the 1.9-million barrel draw expected by analysts, while distillate stocks also dropped more than expected — despite gains in crude stocks.
“Declining US [petrol] inventories raised expectations for a seasonal demand increase in spring, but concerns about the global economic impact of tariff wars weighed on the market,” said Hiroyuki Kikukawa, chief strategist of Nissan Securities Investment.
“With strong and weak factors progressing simultaneously, it has become difficult for the market to lean decisively in one direction or the other,” he said.
Donald Trump threatened on Wednesday to escalate a global trade war with further tariffs on EU goods, as major US trading partners said they would retaliate for trade barriers already erected by the US president.
Trump’s hyper-focus on tariffs has rattled investors, consumers and business confidence and raised US recession fears.
Meanwhile, oil cartel Opec said on Wednesday that Kazakhstan led a sizeable jump in February crude output by the wider Opec+, highlighting a challenge for the producer group in enforcing adherence to agreed output targets.
Worry about fumbling jet fuel demand weighed further on markets, JPMorgan analysts said, adding that US Transportation Security Administration data showed passenger volumes for March had decreased by 5% year on year, after stagnant traffic in February.
However, firm demand expectations limited overall market weakness.
Signs of robust US demand and Ukraine’s deployment of 377 drones targeting Russian energy infrastructure and military installations supported prices, said JPMorgan analysts in a client note.
“As of March 11, global oil demand averaged 102.2-million barrels a day, expanding 1.7-million barrels a day year over year and exceeding our projected increase for the month by 60,000 barrels a day,” they added.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Oil falls amid macroeconomic concerns
Nissan Securities Investment says that worry about the global economic effect of tariff wars is weighing on the market
Tokyo/Singapore — Oil prices slipped on Thursday after a surge in the previous session on a larger-than-expected draw in US petrol stocks, as markets weighed macroeconomic concerns against firm near-term demand.
Brent futures fell 5c to $70.9 a barrel by 4.26am GMT, while US West Texas Intermediate (WTI) crude futures shed 10c to $67.58 a barrel.
Both benchmarks rallied about 2% on Wednesday as US government data showed tighter-than-expected oil and fuel inventories.
US petrol inventories fell by 5.7-million barrels, more than the 1.9-million barrel draw expected by analysts, while distillate stocks also dropped more than expected — despite gains in crude stocks.
“Declining US [petrol] inventories raised expectations for a seasonal demand increase in spring, but concerns about the global economic impact of tariff wars weighed on the market,” said Hiroyuki Kikukawa, chief strategist of Nissan Securities Investment.
“With strong and weak factors progressing simultaneously, it has become difficult for the market to lean decisively in one direction or the other,” he said.
Donald Trump threatened on Wednesday to escalate a global trade war with further tariffs on EU goods, as major US trading partners said they would retaliate for trade barriers already erected by the US president.
Trump’s hyper-focus on tariffs has rattled investors, consumers and business confidence and raised US recession fears.
Meanwhile, oil cartel Opec said on Wednesday that Kazakhstan led a sizeable jump in February crude output by the wider Opec+, highlighting a challenge for the producer group in enforcing adherence to agreed output targets.
Worry about fumbling jet fuel demand weighed further on markets, JPMorgan analysts said, adding that US Transportation Security Administration data showed passenger volumes for March had decreased by 5% year on year, after stagnant traffic in February.
However, firm demand expectations limited overall market weakness.
Signs of robust US demand and Ukraine’s deployment of 377 drones targeting Russian energy infrastructure and military installations supported prices, said JPMorgan analysts in a client note.
“As of March 11, global oil demand averaged 102.2-million barrels a day, expanding 1.7-million barrels a day year over year and exceeding our projected increase for the month by 60,000 barrels a day,” they added.
Reuters
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