Brent inches up on Trump’s tariff threats
The front-month ICE Brent contract has moved $0.12/bbl higher on the day from Friday, to trade at $78.42/bbl at 09.00 GMT.
PHOTO: Getty Images
Upward pressure:
US President Donald Trump has warned of imposing taxes, tariffs and sanctions on Russia “and other participating countries” if a deal to end the war in Ukraine is not reached soon, Reuters reported. This has affected market sentiment by heightening concerns over oil supply and providing some support to Brent futures.
“The tariff story has become an increasing concern for the market,” said two analysts from ING Bank.
A sharp decline in US crude oil inventories has further supported Brent futures.
According to the US Energy Information Administration (EIA), US commercial crude oil inventories fell by 1 million bbls in the week ending 17 January, reaching 411.7 million bbls—their lowest level since March 2022.
Downward pressure:
Trump has reiterated his call for OPEC to lower oil prices to weaken Russia's finances and help end the war in Ukraine.
“One way to stop it [the war in Ukraine] quickly is for OPEC to stop making so much money and drop the price of oil... That war will stop right away," Trump stated.
Trump's statement has created a downward pressure on oil prices.
Meanwhile, the US has reversed plans to impose sanctions and tariffs on Colombia after the South American country agreed to accept deported migrants from the US, the White House announced late Sunday. Sanctions could have disrupted oil supplies, but with tariffs on hold, oil prices have come under some pressure.
China's Manufacturing Purchasing Managers' Index (PMI) recorded a growth of 49.1% in January, which is “well below expectations and the lowest since August,” according to Vandana Hari, founder and analyst at VANDA Insights.
A PMI below 50 signals a contraction in economic activity, reflecting weaker economic health and reduced demand for commodities like oil.
By Tuhin Roy
Please get in touch with comments or additional info to news@engine.online
