Oil prices hold steady as Trump threatens tariffs on top suppliers

Last Update: 2025-01-30 09:30:23 - Source: Shafaq News
Oil prices hold steady as Trump threatens tariffs on top suppliers

Shafaq News/ Oil prices were littlechanged on Thursday as markets braced for threatened tariffs by U.S. PresidentDonald Trump on Mexico and Canada, the two largest suppliers of crude oil toUnited States, and awaited a meeting of OPEC+ producers.

Brent crude futures were down 7cents, or 0.1%, at $76.51 a barrel by 0411 GMT. U.S. crude futures were littlechanged at 2 cents up, or 0.03%, to $72.64. U.S. crude futures had settled attheir lowest price this year on Wednesday.

Trump still plans to make good onhis promise to impose tariffs on Canada and Mexico on Saturday, White Housespokeswoman Karoline Leavitt told reporters on Tuesday.

Trump's nominee to run the CommerceDepartment, Howard Lutnick, said on Wednesday that Canada and Mexico can avoidthe tariffs if they act swiftly to close their borders to fentanyl, whilevowing to slow China's advancement in artificial intelligence.

On the demand front, crude oilstockpiles in the U.S. rose by 3.46 million barrels last week, roughly in linewith analysts' estimate for a rise of 3.19 million barrels, as winter stormsthat swept the country last week hit demand.

On the supply side, crude oilexports from Russia's western ports in February are set to fall by 8% from theJanuary plan as Moscow boosts refining, traders said and Reuters calculationsshowed, after the latest U.S. sanctions squeezed crude exports.

Investors are also looking ahead toa ministerial meeting by the Organization of the Petroleum Exporting Countriesand its allies, together called OPEC+, scheduled for Feb. 3.

The OPEC+ group of leading oilproducers is set to discuss Trump's efforts to raise U.S. oil production andtake a joint stance on the matter, Kazakhstan said on Wednesday. Russia is alsoa member of the OPEC+ group.

Trump has publicly called on OPECand its leading member, Saudi Arabia, to lower oil prices, saying doing sowould end the conflict in Ukraine. He has also set up an agenda of maximizingthe U.S. oil and gas production, already the world's largest.

However, analysts believe a pricewar between the U.S. and OPEC+ is unlikely as it may hurt both.

"A price war with the U.S.would involve OPEC+ producers maximising their output to undercut prices anddrive shale production into decline," analysts at BMI, a Fitch Groupdivision, said in a note.

They predict Brent crude oil pricesmay go down below $50 as OPEC+ can deploy over 5 million barrels of oil per dayin its spare capacity, prompting a fall in the U.S. shale oil production alongthe prices.

(REUTERS)