An oil pump of IPC Petroleum France is seen during sunset outside Soudron, near Reims, France, February 6, 2023.
Oil prices settled flat on Thursday, paring early losses of more than 1% as U.S. tariff announcements were delayed until at least April, feeding hope that the world could avoid a trade war that would pressure economies and energy demand.
Brent crude futures settled at $75.02 a barrel, down 16 cents, or 0.21%. U.S. West Texas Intermediate crude (WTI) finished down 8 cents, or 0.11%, at $71.29 a barrel.
Prices had tumbled earlier as a potential peace deal between Russia and Ukraine kept traders concerned that an end of sanctions on Moscow could boost global energy supplies.
U.S. President Donald Trump ordered commerce and economics officials to study reciprocal tariffs against countries that place tariffs on U.S. goods. Their recommendations are not due until April 1, allowing more time for negotiations with trading partners, market participants said.
"We saw a big recovery in prices on tariffs not going into effect until April," said Phil Flynn, senior analyst with Price Futures Group. "That will allow time for negotiation."
On Wednesday, Brent and WTI fell more than 2% after Trump said Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskiy expressed a desire for peace in separate phone calls with him. Trump ordered U.S. officials to begin talks on ending the war in Ukraine.
The oil price decline over the past 24 hours looks to be driven by a change from worries about tight supplies to concern about sufficient supply, said UBS analyst Giovanni Staunovo, adding that some expect an increase in Russian energy exports.
Russian oil exports could be sustained if workarounds to the latest U.S. sanctions package are found, after Russian crude production rose slightly last month, the International Energy Agency (IEA) said in its latest oil market report.
The Ukraine news and Wednesday's U.S. oil inventories data offset higher U.S. inflation numbers that could drive the Federal Reserve to take a cautious approach to interest rate cuts in 2025, said PVM analyst John Evans.
Russia is the world's third-largest oil producer and sanctions imposed on its crude exports after its invasion of Ukraine nearly three years ago have supported higher prices.
ANZ analysts said on Thursday that oil prices declined on news of the potential peace talks because of "optimism that risks to crude oil supplies would ease", pointing to the U.S. and EU sanctions.
A build in crude oil inventories in the United States, the world's biggest crude consumer, also weighed on the market. U.S. crude stocks rose more than expected last week, data from the Energy Information Administration (EIA) showed on Wednesday.
