Oil prices edged higher on Wednesday, boosted by a weaker dollar, but rising concerns about a slowing U.S. economy and the impact of tariffs on global growth capped gains.

Brent crude futures were up 13 cents, or 0.2%, at $69.69 a barrel by 0730 GMT, while U.S. West Texas Intermediate crude futures were up 13 cents, or 0.2%, at $66.38 a barrel.

Despite the weakening economic outlook, oil prices have held steady in a positive position, said Daniel Hynes, senior commodity strategist at ANZ. "That's a sign that near-term demand for crude oil remains strong," he said.

The dollar index (.DXY) , opens new tab , fell 0.5% to a fresh 2025 low on Tuesday, boosting oil prices by making crude cheaper for buyers holding other currencies. "The dollar's weakness is countering the bearish bias of a global economic slowdown, although this appears to be short-lived," said Priyanka Sachdeva, senior market analyst at Phillip Nova.

US stock prices, which also influence oil markets, fell again on Tuesday, adding to their biggest sell-off in months, with investors nervous about rising import tariffs and worsening consumer sentiment.

"Overall sentiment remains fragile despite a slight improvement in today's session," said Yeap Jun Rong, market strategist at IG.

"For now, oil market sentiment is likely to remain subdued, with tariff developments still unclear and persistent concerns over risks to US growth," Yeap added.

US President Donald Trump's protectionist policies have roiled global markets. He has imposed, then delayed, tariffs on major oil suppliers Canada and Mexico, while also raising tariffs on China, prompting retaliatory measures.

Over the weekend, Trump said a "transition period" was possible and refused to rule out a US recession. IEA chief says oil and gas fields need more investment,

In terms of supply, U.S. crude production is set to hit a record high this year than previously estimated, averaging 13.61 million barrels per day, the U.S. Energy Information Administration said on Tuesday.

Investors are awaiting U.S. inflation data due on Wednesday for clues on the direction of interest rates. They are also closely watching OPEC+'s plans. The producer group has announced plans to increase output in April.

In the U.S., crude stocks rose by 4.2 million barrels in the week to March 7, market sources said, citing figures from the American Petroleum Institute on Tuesday.

The market is now awaiting government data on U.S. stockpiles due on Wednesday for further trading cues. (Newsmaker23)

Source: Reuters