MCX crude oil trades higher on hopes of US auto tariffs relief and ease in trade war

Brent Crude oil futures edged higher in international markets on Tuesday morning, supported by a weaker US dollar, optimism around a potential pause on auto tariffs by US President Donald Trump and a rebound in China’s crude oil imports for March.

Brent Oil June delivery future gained 0.14% to trade at $64.71 per barrel, while WTI crude May future contract traded at 0.17% higher at $61.82 per barrel.

Meanwhile, domestic oil futures also traded higher, reacting to positive sentiments in the global market. As of 9:30 am, the MCX Crude 21 April delivery contract was trading at ₹5,297 per barrel, up by 0.63% from its previous closing of ₹5,264 per barrel. The open interest of the contract stood at 508 lots in early morning trades.

China, which is among the largest crude oil importers, reported a 5% YoY rise in oil imports in March. The rise was driven by increased purchases from Russia and Iran ahead of anticipated US sanctions. As China’s crude oil imports were subdued during the first two months of the year, this rebound has helped ease concerns and uncertainty around global crude prices.

In addition to this, some positive announcements around US tariffs also supported the oil prices. On Monday, US President Donald Trump indicated a potential pause in the 25% tariffs imposed on foreign vehicles imported to the US markets, reducing fears of escalating trade tensions. Previously, the US government also excluded some electronics, including smartphones and laptops, from import tariffs.

Despite today’s rise, crude oil prices remained close to its four-year lows hit last week as uncertainty around the global growth outlook due to US trade policies weighed on the oil prices. Besides this, the Organization of the Petroleum Exporting Countries' (OPEC) decision to increase oil output earlier this month also led to oil prices hitting multi-year lows.