Oil News: Prices Steady as Traders Weigh Demand Strength Against Supply Risks

Crude Oil Prices Steady as Dollar Weakens, but Economic Risks Loom

Light crude oil futures are trading higher on Wednesday, consolidating near a key support zone between $65.20 and $63.87. A breakout above $68.22 could spark short-covering, with the next resistance level seen at $70.35-$70.41. However, such a move would require a significant fundamental shift in supply-side conditions.

At 10:01 GMT, Light Crude Oil futures are trading $66.60, up $0.35 or -0.53%.

Weaker Dollar Supports Prices, but Tariff Concerns Weigh

Oil prices are finding support from a weakening U.S. dollar, which fell 0.5% to a fresh 2025 low on Tuesday. A weaker dollar makes crude more attractive to buyers using other currencies, providing short-term upside. However, mounting concerns over a U.S. economic slowdown and ongoing trade tariff uncertainties are capping gains.

According to Daniel Hynes, senior commodity strategist at ANZ, oil’s resilience despite a softening economic outlook indicates strong near-term demand. Meanwhile, Priyanka Sachdeva, senior market analyst at Phillip Nova, noted that while a weaker dollar offsets bearish economic signals, the effect may be temporary.

U.S. Stock Market Selloff and Trade Policy Uncertainty

Equity markets are adding to oil’s volatility, with U.S. stock prices posting their steepest declines in months. Trade protectionism remains a key concern as the U.S. has implemented, then postponed, tariffs on major oil suppliers Canada and Mexico while escalating duties on China.

President Trump’s comments over the weekend, signaling a “period of transition” and leaving the possibility of a U.S. recession open, have added further uncertainty.

Yeap Jun Rong, market strategist at IG, highlighted that oil sentiment remains fragile, with investors seeking clarity on tariffs and U.S. economic conditions. Persistent growth risks could limit upside movement in crude prices.

Rising U.S. Crude Supply and Market Outlook

On the supply side, U.S. crude oil production is expected to exceed previous forecasts, with the Energy Information Administration (EIA) now projecting a record 13.61 million barrels per day. Meanwhile, OPEC+ plans to increase production in April, adding to global supply pressures.

U.S. crude stockpiles also rose by 4.2 million barrels for the week ending March 7, according to API data, with official EIA inventory figures due later on Wednesday. Traders will be closely watching these numbers, along with upcoming U.S. inflation data, for potential signals on Federal Reserve policy and broader economic trends.

Market Forecast: Upside Limited Without Stronger Demand Catalysts

Crude oil prices are benefiting from short-term dollar weakness but remain vulnerable to economic headwinds and policy uncertainty. While demand appears stable, rising U.S. production and OPEC+ output increases could keep a lid on further gains.

A decisive break above $68.22 could push prices toward $70.35, but sustained upside will require stronger demand signals or unexpected supply disruptions. Traders should monitor U.S. economic data and geopolitical developments for potential catalysts.

More Information in our Economic Calendar.