Oil prices rise on short-covering, but tariff worries linger

Oil prices climbed on Tuesday as investors took advantage of the previous day’s losses to cover short positions, although concerns persisted over economic headwinds from tariffs and U.S. monetary policy that could dampen fuel demand, Reuters reported.

Brent crude futures (BZ=F) rose 92 cents, or 1.39%, to $66.32 a barrel at 0830 GMT. The U.S. West Texas Intermediate crude (CL=F) contract for May, which expires on Tuesday, was at $64.05 a barrel, up 97 cents, or 1.54%.

The more actively traded WTI June contract was up 0.7%, or 45 cents, at $62.86 a barrel.

Both benchmarks dropped more than 2% on Monday, as signs of progress in nuclear deal talks between the U.S. and Iran helped ease supply concerns.

“Some short-covering emerged after Monday’s sharp sell-off,” said Hiroyuki Kikukawa, chief strategist of Nissan Securities Investment, a unit of Nissan Securities.

“However, concerns about a potential recession driven by the tariff war persist,” he said, predicting that WTI will likely trade in the $55–$65 range for the time being given ongoing uncertainty related to tariffs.

On Monday, U.S. President Donald Trump repeated his criticism of Federal Reserve Chair Jerome Powell and said the U.S. economy could slow unless interest rates were lowered immediately.

His comments about Powell fuelled worries about the Fed’s independence in setting monetary policy and the outlook for U.S. assets. Major U.S. stock indexes dropped and the dollar index slid to a three-year low on Monday.