Oil was largely steady in choppy trade on Thursday with global benchmark Brent still below $70 a barrel under pressure from tariffs between the U.S., Canada, and China, and OPEC+ plans to raise output.

Brent futures were up 8 cents, or 0.1%, at $69.38 a barrel by 1:40 p.m. ET (1840 GMT), while U.S. West Texas Intermediate crude futures eased 6 cents, or 0.1%, to $66.24.

Brent hit $68.33 on Wednesday, its weakest since December 2021, after a larger-than-expected build in U.S. crude inventories added to the bearish news earlier in the week of OPEC+'s hike in output quotas for the first time since 2022 and new U.S. tariffs enacted on Tuesday, that triggered a trade war.

"The OPEC news of adding barrels next month, along with a Russian/Ukraine peace deal now looking more promising and a flip/flop of tariffs is keeping crude in a volatile trade," said Dennis Kissler, senior vice president of trading at BOK Financial.

Russia said it will seek a peace deal in Ukraine that safeguards its own long-term security and will not retreat from the gains it has made in the conflict.

Goods from Mexico covered by a North American trade pact will be exempted for a month from the 25% tariffs that were imposed earlier this week, the U.S. president said on Thursday, while making no mention yet of a comparable reprieve for Canada.

Oil recovered and stabilised somewhat after the U.S. said it will make automakers exempt from the 25% tariffs.
A source familiar with the discussions said that U.S. President Donald Trump could eliminate the 10% tariff on Canadian energy imports, such as crude oil and gasoline, that comply with existing trade agreements.

Chinese officials have flagged that more stimulus is possible if economic growth slows, seeking to support consumption and cushion the impact of an escalating trade war with the U.S.

Meanwhile, the U.S. will exert a campaign of maximum pressure of sanctions on Iran to collapse its oil exports and put pressure on its currency, Treasury Secretary Scott Bessent said.

Downside risks on demand will likely be greater than supply-side risks at this point with the additional oil coming from OPEC, said Scott Shelton, energy analyst at TP ICAP (LON:NXGN).

"Spare capacity can offset supply losses, but there is no way to fix demand, which should flounder under the weight of sanctions and underperform," Shelton added.

The OPEC+ producer group, comprising the Organization of the Petroleum Exporting Countries and allies including Russia, decided on Monday to increase output for the first time since 2022.

One OPEC+ delegate, commenting on the market's reaction to Monday's decision, said the price drop looked overdone and hoped that the market was now on a "gradual recovery."

Source: Investing.com