09:05 AM EDT, 03/13/2025 (MT Newswires) -- Oil edged lower early on Thursday even as the International Energy Agency (IEA) said it expects higher global demand this year to be accompanied by rising inventories, while cautioning its outlook is clouded by U.S. trade wars.

West Texas Intermediate crude oil for April delivery was last seen down US$0.33 to US$67.35 per barrel, while May Brent crude was down US$0.34 to US$70.61.

In its monthly Oil Market Report, the IEA said it expects global oil demand to rise by one-million barrels per day this year, up from 0.83-million bpd in 2024. However it noted global supply is on the rise as OPEC+ readies to return 2.2-million bpd of production cuts to market, while output from North and South America is climbing. The agency expects supply to outpace demand by 0.6-million bpd this year, though economic turmoil sparked by U.S. President Donald Trump's tariff wars is clouding the outlook.

"The macroeconomic conditions that underpin our oil demand projections deteriorated over the past month as trade tensions escalated between the United States and several other countries. New US tariffs, combined with escalating retaliatory measures, tilted macro risks to the downside," the IEA noted.

Prices rose around 2% on Wednesday as U.S. inventories rose less than expected last week, while slowing U.S. consumer prices bolstered hopes for more rate cuts from the Federal Reserve.

"The market is now pricing in two additional rate cuts for this year. The data is undeniably conducive for the US Administration, which can argue that inflation is discernibly unaffected by tariffs. Yet, it must be remembered that as of February only China was punished with excise duty and as the trade war with other trading partners intensifies yesterday's brightening of investors' mood could prove brief," PVM Oil Associates wrote.