Oil prices edged higher on Tuesday, recovering from multi-week lows, as the White House reaffirmed U.S. President Donald Trump’s plans to impose 25% tariffs on imports from Canada and Mexico starting Saturday. Brent crude futures rose $0.41 (0.53%) to $77.49 per barrel, while U.S. West Texas Intermediate (WTI) climbed $0.60 (0.82%) to $73.77. Despite these gains, concerns over weaker demand linked to China’s soft economic data and milder weather globally capped the rebound.
Market jitters persisted as Trump weighed additional tariffs on China, stoking fears of energy trade disruptions across U.S. borders with Canada and Mexico. Further tension arose in Libya, where protests threatened to disrupt about 450,000 barrels per day of exports from Es Sider and Ras Lanuf ports. However, Libya’s National Oil Corp quickly addressed the issue, ensuring normal export activity and easing fears of immediate supply disruptions.
In China, an unexpected contraction in January’s manufacturing activity raised doubts about the country’s oil demand outlook. The situation was exacerbated by U.S. sanctions on Russian oil trade, with Shandong refineries potentially losing up to 1 million barrels per day of crude supply due to restrictions on U.S.-sanctioned tankers. Many Chinese refineries have either halted operations or plan to enter maintenance, citing financial losses from new tariff and tax policies.
Meanwhile, in the U.S., forecasts of warmer-than-normal weather reduced heating fuel demand, further tempering oil price gains. This follows recent price rallies driven by extreme cold, which had boosted natural gas and diesel demand.