Oil prices edged up on Thursday after Saudi Arabia raised prices for March.
However, the previous day’s decline in benchmark Brent prices was the largest in almost three months, and the increase was insignificant in comparison.
At the time of writing, the price of West Texas Intermediate crude oil on the New York Mercantile Exchange was at $71.38 per barrel, up 0.5%. Brent crude on the Intercontinental Exchange was up 0.4% at $74.91 a barrel.
Oil prices had fallen more than 2% on Wednesday after the market focused on the US President Donald Trump’s trade narrative, which was perceived as negative for demand this year.
Warren Patterson, head of commodities strategy at ING Group, said:
The market focused on the tariff story, a theme likely to dictate sentiment for much of this year. In addition, the EIA’s weekly inventory report was fairly bearish with a large increase in crude oil stocks over the last week.
Crude oil prices have dropped 10% since their 2025 peak on January 15. Market analysts anticipate continued volatility due to uncertainty surrounding Trump administration policies on energy issues, including domestic production and regulation.
Increased US oil output could flood the global market and lower prices, while protectionist trade policies or geopolitical tensions could disrupt supply and raise prices.
The crude oil market is likely to remain turbulent in the near term.
Saudi Arabia raises prices
“So far today, oil prices are holding up better as Saudi Arabia has increased its official selling prices for all grades and to all regions for March loadings,” Patterson said.
“This ties in with the strength that we have seen in the Middle East physical market since the start of the year.”
The price of Saudi Aramco’s flagship Arab Light crude oil was raised by $2.40 per barrel to $3.90 per barrel for March over the benchmark, reaching its highest level since December 2023.
The increase also saw its highest monthly increase since August 2022.
“After the overnight sell-off and the Saudi news, there is likely to be some buying from traders covering shorts ahead of a strong band of support in the $70/68 region,” Tony Sycamore, market analyst with IG was quoted in a Reuters report.
US inventories rise
Crude oil inventories in the US jumped by 8.7 million barrels in the week ended January 31 to 423.8 million barrels, according to the Energy Information Administration data.
Total motor gasoline inventories increased by 2.2 million barrels from last week and are slightly above the five-year average for this time of year.
This was the largest build in crude oil stocks in the US since February 2024.
The increase was driven by strong imports, which grew by 467,000 barrels per day on a week-on-week basis with stronger flows from Canada, which increased 347,000 barrels a day.
“In addition, oil output recovered last week, following the impact of winter storms,” Patterson said.
Meanwhile, China imposed retaliatory tariffs on US oil, liquefied natural gas, and coal.
This move was seen as a direct countermeasure to the US actions.
However, the impact of China’s retaliatory tariffs was limited due to the relatively small volume of these energy products that China imports from the US.
While the tariffs represented a symbolic gesture and an escalation of the trade dispute, their actual economic effect on the US was muted.
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