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What’s happening: Crude oil climbed to two-week high levels on Wednesday amid concerns over global supplies.
What happened: US President Donald Trump announced a sanction against a China-based teapot refinery for buying Iran’s crude oil, which fuelled supply concerns.
The OPEC+ (Organization of the Petroleum Exporting Countries) received updated plans for some members to make production cuts, intensifying supply fears.
Why it matters: Crude prices climbed despite the IEA (International Energy Agency) warning that global demand growth for crude oil in 2025 will be the weakest since 2020. The Trump administration’s tariff moves have sparked concerns around global economic growth and, in turn, the demand for oil.
Oil prices rose as Donald Trump locked horns with Iran. Trump announced fresh sanctions targeting Iran’s oil exports, with the US relaunching talks with Tehran over its nuclear programme.
Data released on Wednesday by the Energy Information Administration (EIA) showed that US crude stockpiles grew while gasoline and distillate inventories declined during the latest week.
Crude inventories rose by 515,000 barrels to 442.9 million barrels in the week ended April 11. This was higher than market estimates of 507,000 barrels. Meanwhile, gasoline stockpiles contracted by 1.958 million barrels, versus market estimates of a drawdown of 1.6 million barrels. Distillate stockpiles also fell by 1.851 million barrels, compared to expectations of 1.2 million.
The OPEC+ received updated plans for Iraq, Kazakhstan and some other countries to make further oil output cuts to compensate for having produced oil above agreed quotas. The cartel has been implemented output cuts to support oil prices.
Brent crude futures gained $1.18, or 1.8%, to close at $65.85 a barrel on Wednesday, while WTI crude oil climbed $1.14, or 1.9%, to settle at $62.47 a barrel. Both oil benchmarks settled at their strongest levels since April 3.
In other energy trading, April gasoline settled at $2.0434 a gallon, while April heating oil closed at $2.0697 a gallon and natural gas for April delivery at $3.247 per million British thermal units.
What to watch: Investors will continue monitoring the Trump administration’s tariff-related announcements as well as talks between the US and Iran.
Data on natural gas stockpiles change from the EIA (1830 UAE Time) will also remain in focus today. US natural gas inventories, which rose by 57 billion cubic feet in the week ending April 4, are expected to increase by 27 billion cubic feet in the recent week.
Context: Equity markets in Europe closed mixed on Wednesday amid ongoing US tariff concerns.
Details: Global investors remain concerned over continuous shifts in tariff announcements from the Trump administration.
European Central Bank President Christine Lagarde said that the impact of tariffs is expected to halve growth in the Eurozone this year, versus the earlier forecast of 0.9%. Although a 90-day pause in tariffs provides some relief, the ECB expressed concern about the wider impact on trade and investment.
On the earnings front, shares of ASML settled lower by more than 5% on Wednesday after the chip company reported a decline in its revenue and posted downbeat net bookings.
The Eurozone’s annual inflation rate eased to 2.2% in March, from 2.3% in the previous month. The Eurozone’s current account surplus shrank to €33.1 billion in February, from €33.8 billion in the year-ago period.
UK’s annual inflation rate also fell to 2.6% in March, from 2.8% in the previous month. The figure also came in better than Bank of England’s forecast of 2.7%.
The STOXX Europe 600 Index fell 0.19% to close at 507.09 on Wednesday after recording gains in the previous two sessions, while France’s CAC 40 closed lower by 0.07%.
London’s FTSE 100 gained 0.32% to settle at 8,275.60, while Germany’s DAX 40 rose by 0.27% to 21,311.02.
What to watch: Investors await the ECB’s interest rate decision (1615 UAE Time) today. The central bank is expected to lower interest rates by 25 basis points, which would be the sixth rate cut in a row since June.
Other Markets: US trading indices closed lower on Wednesday, with the Dow Jones index, S&P 500 and Nasdaq 100 down by 1.73%, 2.24% and 3.04%, respectively.
US special envoy Steve Witkoff said that Russian President Vladimir Putin is open to a peace agreement with Ukraine. The news sent the RUB/USD pair lower in forex trading this morning.
Australia’s unemployment rate rose to 4.1% in March, from 4% in the previous month, exerting pressure on the AUD/USD forex pair.
The Bank of Korea kept its base rate unchanged at 2.75% during its latest meeting, sending the KRW/USD pair lower in forex trading this morning.
Singapore’s non-oil domestic exports rose by 5.4% year-over-year in March, missing market estimates of a 13.6% jump, which exerted pressure on the SGD/USD forex pair.
New Zealand’s annual inflation rate rose to 2.5% in the first quarter, from 2.2% in the previous quarter. This being the highest reading since June 2024 sent the NZD/USD pair lower in forex trading this morning.
Canada’s CFIB business barometer (1500 UAE Time) and foreign securities purchases (1630 UAE Time), South Africa’s building permits (1500 UAE Time), Turkey’s interest rate decision (1500 UAE Time) and M3 money supply (1530 UAE Time), India’s M3 money supply (1530 UAE Time), as well as US building permits (1630 UAE Time), housing starts (1630 UAE Time), initial jobless claims (1630 UAE Time), continuing jobless claims (1630 UAE Time), Philadelphia Fed manufacturing index (1630 UAE Time), Baker Hughes oil rig count (2100 UAE Time) and Baker Hughes total rigs count (2100 UAE Time).
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