Onome Amuge
Oil prices maintained bearish movements on Thursday, as data indicated a larger-than-expected build in U.S. crude inventories. This is as the potential imposition of tariffs on oil imports from Mexico and Canada by the U.S. President Donald Trump remained a primary area of focus for market participants, given that the two countries are the top suppliers of crude to the U.S, further raising concerns over the impact of the protectionist trade policy on the global energy market.
Oil markets remained under pressure on Thursday, as Brent crude futures fell 43 cents, or 0.6 percent, to trade at $76.15 per barrel, while U.S. crude futures dropped 46 cents, or 0.6 percent, to $72.16 per barrel. This represents the lowest settlement for U.S. crude futures this year, building on the downward momentum seen in the previous day’s trading session.
John Evans, an oil market analyst at PVM, underscored the prevailing sentiment among market participants, which he described as being dominated by speculation over the potential imposition of tariffs on oil imports from Canada and Mexico by the U.S, a move promised by President Donald Trump to be unveiled on February 1.
Adding to the uncertainty swirling around the global oil markets, the White House reiterated on Tuesday its plan to impose tariffs of 25 percent on imports from both Canada and Mexico, further escalating the trade tensions between the three North American countries.
However, President Trump’s nominee to lead the Commerce Department has suggested that Canada and Mexico may be able to avert the tariffs by cracking down on fentanyl trafficking across their borders.
Amidst the escalating tensions between the U.S. and Russia, fresh sanctions imposed by the U.S. government have placed a constricting grip on Russian crude oil exports from the country’s western ports, with traders reporting that shipments are expected to decline by 8 percent in February compared to the initial plan for January.
Focused on the future of the global oil market, investors are keeping a watchful eye on the upcoming meeting of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, OPEC+, set to take place on February 3rd.
At the meeting, the cartel and its partners are set to discuss Trump’s recent push for increased U.S. oil production and potentially forge a united stance on the matter. Kazakhstan, one of the participants in the coalition, provided insight into the forthcoming meeting by revealing that the issue will be a key point of discussion among the group.
