West Texas Intermediate (WTI) crude oil prices saw a modest uptick on Tuesday, trading just below the mid-$61.00s mark—up more than 1% for the day. This follows volatile price swings the previous day, driven by concerns over US tariffs.
The US Dollar (USD) faces renewed selling pressure, halting a brief recovery from a multi-month low. Investors are speculating that the economic slowdown triggered by tariff-related tensions could prompt the Federal Reserve to resume its rate-cutting cycle, a scenario seen as favorable for USD-denominated commodities like crude oil. This sentiment, coupled with a technical bounce after Monday’s dip to its lowest level since early 2021, helped buoy oil prices.
However, significant challenges persist. Concerns are mounting that the aggressive tariffs imposed by US President Donald Trump could spark a global trade war, undermining fuel demand. Additionally, a surprise move by eight OPEC+ members to accelerate a planned production increase, returning 411,000 barrels per day to the market in May, has raised worries about potential oversupply. These factors may limit any sustained recovery in crude oil prices.
Looking ahead, market attention turns to the release of the Federal Open Market Committee (FOMC) meeting minutes on Wednesday, followed by the US Consumer Price Index (CPI) on Thursday and the Producer Price Index (PPI) on Friday. Trade developments will continue to influence USD dynamics and play a key role in shaping the outlook for crude oil.
