Oil prices rose on Friday as Wall Street stocks bounced off session lows, but crude benchmarks were still poised for their first weekly fall in three weeks on fears U.S. plans to impose tariffs on steel and aluminum could squeeze economic growth, and as U.S. crude inventories climbed, APA reports quoting Reuters.
On Thursday, oil followed the stock market lower after President Donald Trump said he would impose hefty tariffs to protect U.S. producers. Investors feared the move would spark a trade war, with retaliation from major partners such as China, Europe and Canada.
The U.S. oil and gas industry slammed the tariff plan, saying it would kill energy jobs by raising costs for big infrastructure projects.
Oil slid along with equities again early on Friday, but oil rebounded with U.S. stocks as the S&P 500 index .SPX and the Nasdaq .IXIC moved into positive territory.
Brent crude LCOc1 rose 30 cents to $64.13 a barrel by 12:10 p.m. EST (1710 GMT). U.S. crude CLc1 was up 16 cents at $61.15. Both contracts reversed direction after trading lower early in the session, but remained poised for weekly declines.
“Tariffs brought concerns that economic growth will be unable to boost demand,” said Gene McGillian, director of market research at Tradition Energy. Crude prices remained under pressure from concerns that U.S. production may be high enough to offset output cuts from OPEC and Russia, he said.
On Wednesday, the government reported that U.S. crude stocks USOILC=ECI rose faster than expected while gasoline inventories posted a surprisingly large increase.
“We are being driven by the pickup in U.S. inventories and in general terms the market went a bit too far, too soon,” said Ric Spooner, chief market analyst at CMC Markets in Sydney.