Brent moves lower on demand growth fears
The front-month ICE Brent contract has moved $0.93/bbl lower on the day, to trade at $76.18/bbl at 09.00 GMT.
PHOTO: Oil barrels. Getty Images
Upward pressure:
Brent crude oil has regained some ground this week amid uncertainty around US tariffs on Canada and Mexico.
The two countries, which are still the US’ biggest trading partners, could avoid new levies if they act on illegal migration and fentanyl drug flows, US President Donald Trump has said.
“Earlier in the day, crude oil prices rallied on expectations that the tariffs will go into effect this weekend,” ANZ Bank senior commodity strategist Daniel Hynes remarked.
Downward pressure:
Demand for oil has been relatively slow in top consumers like the US and China so far this year, according to market analysts.
Commercial US crude oil inventories gained 3.5 million bbls to touch 415 million bbls for the week ending 24 January, according to data from the US Energy Information Administration (EIA).
A surge in US crude stocks can indicate a drop in oil demand, which can contribute to cap Brent's price rise. This was the first weekly rise in inventories this year.
“US weekly inventory numbers from the EIA yesterday remained fairly bearish for the oil market,” two analysts from ING Bank said.
Brent has traded less than usual due to the Lunar New Year holiday break in China and several southeast Asian countries.
“Trading volumes were relatively subdued as the Chinese market has been closed for the Lunar New Year Holidays,” ING Bank’s analysts said.
By Aparupa Mazumder
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