Oil prices rebounded slightly on Thursday in the global commodities market after hitting a 3-year low as the U.S. eased tensions with tariff exemptions on cars from Canada and Mexico under mutual agreement.
Brent crude increased by 0.47%, trading at $69.65 per barrel, up from $69.32 at the close of the previous session. The US benchmark West Texas Intermediate increased by 0.48%, settling at $66.54 per barrel, compared to its prior session close of $66.22.
Sentiment remains negative in the oil market, with ICE Brent falling close to 2.5% Wednesday. It settled below $70 per barrel after briefly trading to its lowest level in three years. Rising OPEC supply and prospects for further increases, combined with ever-present tariff uncertainty, pushed the market lower, ING says in a note.
According to commodities strategists at ING, recent price weakness makes it difficult for US producers to “drill, baby, drill.”
Producers need, on average, a $64 per barrel price level to drill a new well profitably, according to the Dallas Federal Reserve Energy Survey. The US Energy Information Administration (EIA) reported that US crude oil inventories increased by 3.61 million barrels over the last week. That represents a marked increase from the 1.5 million barrels decline the American Petroleum Institute (API) reported the previous day.