Oil Recovers From This Year’s Low as Traders Weigh Trump Impact
Oil edged up from its lowest level this year as US President Donald Trump’s geopolitical positions and threats of tariffs on energy clouded the market’s outlook.
Brent crude traded above $75 after falling 2.1% on Wednesday to cancel out all year-to-date gains. China is set to impose retaliatory tariffs on the US, igniting a trade war that could hurt global growth, while the American leader’s proposal to take over Gaza was widely condemned.
Investors have pulled out of crude and fuel markets since Trump’s inauguration, causing prices to slide, although concerns remain over further restrictions on supply from Iran and Russia, as well as over delayed sanctions on crude from Canada and Mexico. Some Middle Eastern oil grades have strengthened as a result, with Saudi Arabia hiking the price of its flagship variety to Asia by the most in more than two years.
“We remain strongly of the view that President Trump could ultimately prove to be a bearish influence on the oil market,” Citigroup analysts including Francesco Martoccia wrote in a note. “Specifically, Trump has consistently highlighted lower energy prices as the central solution to US inflation, interest rate, debt, and cost of living issues, and that this is a core issue for which he was elected.”
There are signs that the physical market is softening. The premium Brent for immediate delivery is commanding over contracts for the fallowing month shrank to near the least this year, below 50 cents a barrel, compared with around $1 at the end of last month.
For West Texas Intermediate, an options bet was placed for the futures curve to flip next year from the current bullish backwardation structure into a bearish contango pattern, when the nearest contracts trade at a discount to the ones further out because supplies exceed demand.
Brent for April settlement rose 0.8% to $75.19 a barrel at 10:24 a.m. in London. WTI for March delivery climbed 0.9% to $71.65 a barrel.
Sumber : Bloomberg
