Oil Steady in Positive Area Amid Trade War
Oil steadied after its biggest gain in nearly four weeks as tighter Russian crude supplies overshadowed concerns about the impact of President Donald Trump’s expansive tariffs.
Brent crude futures were near $76 a barrel after closing 1.6% higher on Monday, while West Texas Intermediate traded above $72 after a two-day gain. Russian data showed output last month fell further below the country’s OPEC+ quota, according to people familiar with the figures.
Oil prices have had a rocky start to the year, initially rising on higher heating demand due to the Northern Hemisphere winter and U.S. sanctions on Russia’s crude industry. But prices have fallen in the past three weeks as Trump’s tariff regime has threatened a trade war on multiple fronts.
The U.S. president recently ordered 25% tariffs on all U.S. aluminum and steel imports, including from Canada and Mexico, the country’s top two foreign suppliers. The levies took effect on March 12, and Trump has said they “may go higher,” in an effort to help boost domestic production.
“Modeling the impact on what we currently know and what we don’t know of the tariffs remains a challenge to measure,” said Chris Weston, head of research for Pepperstone Group Ltd. But for now, “the mix of short-covering and organic buying suggests we may have seen a near-term bottom.” Trump also said Israel should break a cease-fire agreement with Hamas if its hosts are not returned by the end of the week, risking an escalation in hostilities. Both have accused each other of violating the terms of the deal.
There are signs of tightening in some corners of the market, particularly in the Middle East, where broader curbs on competing flows have meant producers in the region have been able to raise prices for their main customers in Asia. In Europe, soaring natural gas prices have made it more cost-effective to burn oil, potentially boosting demand.
Source: Bloomberg
