Oil prices fall amid tariff concerns and growth slowdown worries
Shafaq News/ Oil prices fell for asecond day on Tuesday, as concerns mounted over a potential U.S. recession, theimpact of tariffs on global growth and as OPEC+ sets its sight on ramping upsupply.
Brent futures fell 6 cents, or 0.1%,to $69.22 a barrel at 0402 GMT, while U.S. West Texas Intermediate crudefutures lost 13 cents, or 0.2%, to $65.90 a barrel.
U.S. President Donald Trump'sprotectionist policies have roiled markets across the world, with Trumpimposing and then delaying tariffs on his country's biggest oil suppliers,Canada and Mexico, while also raising duties on Chinese goods. China and Canadahave responded with tariffs of their own.
Over the weekend, Trump said a"period of transition" for the economy is likely but declined topredict whether the U.S. could face a recession amid stock market concernsabout his tariff actions
"Trump's comments triggered awave of selling as investors started pricing in the risk of weaker growth indemand," Daniel Hynes, senior commodity strategist at ANZ said.
Stocks, which crude prices oftenfollow, slumped on Monday, with all three major U.S. indexes suffering sharpdeclines. The S&P 500 had its biggest one-day drop since December 18 andthe Nasdaq slid 4.0%, its biggest single-day percentage drop since September2022.
U.S. Commerce Secretary HowardLutnick said on Sunday Trump would not let up pressure on tariffs on Mexico,Canada and China.
On the supply front, Russia's DeputyPrime Minister Alexander Novak said on Friday the OPEC+ group agreed to startincreasing oil production from April, but could reverse the decision afterwardsif there were market imbalances.
Despite the market noise, Brent ataround $70 a barrel is quite a strong support and oil prices may look to stagea technical bounce at current levels, said Suvro Sarkar, energy sector teamlead at DBS Bank, adding that the OPEC+ supply response will continue to remainflexible depending on market conditions.
"If oil prices fall below the$70 per barrel mark for an extended period, output hikes may be paused in ouropinion. OPEC+ will also keep a careful eye on Trump's Iran and Venezuelapolicies," he said.
"The U.S. has already takenback Chevron's licence to operate in Venezuela and it remains to be seenwhether Iran sanctions will be intensified. However, in the interim, worriesabout global growth amid policy uncertainties and trade wars will dominate."
In the U.S., crude oil stockpileswere expected to have risen last week, while distillate and gasolineinventories likely fell, a preliminary Reuters poll showed on Monday.
The poll was conducted ahead ofweekly reports from industry group the American Petroleum Institute, due at4:30 p.m. EDT (2030 GMT) later on Tuesday, and the Energy InformationAdministration, the statistical arm of the U.S. Department of Energy, at 10:30a.m. EDT (1430 GMT) on Wednesday.
(REUTERS)
