Oil prices rose on Thursday after heavy sell-offs drove the market to a multi-year low, however tariff uncertainties and a rising supply outlook capped gains.

Brent futures were trading up 39 cents, or 0.56%, at $69.69 a barrel by 0416 GMT, while U.S. West Texas Intermediate crude (WTI) futures climbed 39 cents, or 0.59%, to $66.70 a barrel.

Brent plunged 6.5% in the previous four sessions, dropping to its lowest since December 2021 on Wednesday, while WTI fell 5.8% over the same period to its lowest since May 2023.

"The sharp dip in oil prices below the key $70.00 level may prompt a slight breather in today's session, as technical conditions attempt to stabilise from oversold territory," said Yeap Jun Rong, market strategist at trading platform IG.

"However, recovery momentum remains fragile, with unfavourable supply-demand dynamics being a key overhang for bullish sentiment," he added.

Prices fell after the U.S. enacted tariffs on Canadian and Mexican goods, including energy imports, at the same time major producers decided to raise output quotas for the first time since 2022.

The decline eased as the U.S. said it will exempt automakers from the 25% tariffs, raising optimism the impact of the trade dispute may be mitigated.

Additionally, a source familiar with the discussions said that U.S. President Donald Trump may eliminate the 10% tariff on Canadian energy imports, such as crude oil and gasoline, that comply with existing trade agreements.

"Trump's trade measures are threatening to reduce global energy demand and disrupt trade flows in the global oil market. This was exacerbated by a rise in U.S. inventory," Daniel Hynes, senior commodity strategist at ANZ, said in a note on Thursday.

Source: Investing.com