Oil edges higher, but recession fears and US tariffs limit gains

Oil prices edged higher, helped by weakness in the dollar, although gains were capped as concerns mounted over a US slowdown and the impact of tariffs on global economic growth.

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Brent crude futures were 36 cents, or 0.58%, higher at $69.64 a barrel by 1:01 p.m. EDT (1701 GMT) after falling as low as $68.63 in early trade. US West Texas Intermediate crude futures gained 28 cents, or 0.48%, to $66.31 a barrel after previous declines as well.

Both benchmarks closed 1.58% lower in the previous session. The dollar index hit a four-month low, making oil less expensive for overseas buyers.

Oil prices, however, pared back some gains after US President Donald Trump said on Tuesday he had instructed his commerce secretary to add an additional 9.58% tariff on all steel and aluminium imports from Canada, bringing the total tariff on those products to 50.8%.

“That kind of drama is adding to the volatility here,” said Phil Flynn, senior analyst with the Price Futures Group.

Trump’s protectionist policies have shaken global markets, imposing and delaying tariffs on major oil suppliers Canada and Mexico, while also raising duties on China, prompting retaliatory measures.

Over the weekend, Trump said a “period of transition” was likely and declined to rule out a US recession.