Oil prices edged higher on Thursday as traders assessed a tightening of crude supplies along with new U.S. tariffs and their expected effect on the world's economy.

Brent crude futures gained 24 cents, or 0.3%, to settle at $74.03 a barrel. U.S. West Texas Intermediate crude futures rose 27 cents to $69.92.

On Wednesday, oil prices rose about 1% to their highest since February.

Market participants were weighing escalating trade war risks. U.S. President Donald Trump unveiled his plan on Wednesday to implement 25% tariffs on imported cars and light trucks effective next week, while those on auto parts begin on May 3.

"The biggest headwind for oil right now are the concerns about tariffs, and tariffs might slow demand," said Phil Flynn, senior analyst with Price Futures Group.

Trump on Tuesday imposed new 25% tariffs on potential buyers of Venezuelan crude.

India's Reliance Industries (NSE:RELI), operator of the world's biggest refining complex, will halt Venezuelan oil imports following the tariff announcement, sources said on Wednesday.

Asian bank DBS does not expect prices to return to the higher levels seen in early 2025 as uncertainty over U.S. policy and the prospect of tariff wars weigh on demand, the bank's energy sector team lead Suvro Sarkar said.

Data on U.S. crude inventories on Wednesday showed tighter U.S. supplies, as stockpiles fell by 3.3 million barrels last week versus expectations for a 956,000-barrel draw.

Meanwhile, the number of Americans filing new applications for unemployment benefits slipped last week.

Source: Investing.com