Oil Rebounds While Traders Weigh Trump Tariffs, Cease-Fire Hopes
Oil rebounded from the previous day’s slump as traders assessed President-elect Donald Trump’s threat of new tariffs and progress on a cease-fire agreement between Israel and Hezbollah.
Brent traded above $73 a barrel after recouping earlier losses. Trump’s announcement of the potential levies on Canada, Mexico and China initially sparked a rally in the dollar that weighed on commodities priced in the currency. Crude futures have been locked in a band of about $6 since the middle of October.
Oil slumped on Monday after Israel said it’s potentially days away from a deal with Hezbollah, which could diminish the risk to Middle Eastern crude supply and ships traversing the region. Still, it remains unclear if the Iran-backed group will accept a truce.
“While the signs are looking constructive, a deal between Israel and Iran could still fail,” which would see any short positions being quickly reversed, said Chris Weston, head of research for Pepperstone Group Ltd. The Trump comments may just be “fighting talk” before the president-elect nominates a US trade representative, he said.
Oil’s narrow price range has left traders assessing a number of catalysts for the market’s next move — including the permutations of a second Trump presidency and geopolitical risks linked to Russian and Iranian supplies next year.
Brent for January settlement was 0.8% higher at $73.59 a barrel at 8:53 a.m. in New York.
WTI for January delivery rose 0.9% to $69.53 a barrel.
Source : Bloomberg
