Oil prices remained almost unchanged on Thursday as markets prepared for the threat of tariffs imposed by US President Donald Trump on Mexico and Canada, the two largest oil suppliers to the US, and awaited the meeting of OPEC+ producers, Reuters reports, UNN writes.
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Futures for Brent crude oil fell 7 cents, or 0.09%, to $76.51 per barrel at 07:38 GMT (09:38 Kyiv time). Futures for U.S. West Texas Intermediate crude oil remained almost unchanged, rising 2 cents, or 0.03%, to $72.64. On Wednesday, prices for US crude oil futures settled at their lowest level this year.
Trump is still planning to fulfill his promise to impose tariffs on Canada and Mexico on Saturday, White House Press Secretary Carolyn Leavitt told reporters on Tuesday.
Trump prepares to impose tariffs on Canada and Mexico on February 1 - Reuters29.01.25, 01:39
Trump's nominee to head the U.S. Department of Commerce, Howard Luthnick, said on Wednesday that Canada and Mexico could avoid tariffs if they quickly close their borders to fentanyl, while vowing to slow China's progress in artificial intelligence.
IG market analyst Tony Sycamore does not expect a major impact on oil markets from Trump's promise to impose tariffs, as traders have already factored in the possible move. "(This is) the main reason why crude oil is trading where it is," he said.
On the demand side, U.S. oil inventories rose by 3.46 million barrels last week, roughly in line with analysts' forecasts of a 3.19 million barrel increase, as winter storms that hit the country last week hit demand.
On the supply side, oil exports from Russia's western ports are set to fall by 8% in February compared to the January plan as Moscow increases refining, traders and Reuters estimates say, after the latest US sanctions cut oil exports.
Investors are also looking forward to the ministerial meeting of the Organization of the Petroleum Exporting Countries and its allies, collectively referred to as OPEC+, scheduled for February 3.
The OPEC+ group of leading oil producers intends to discuss Trump's efforts to increase US oil production and take a common position on the issue, Kazakhstan said on Wednesday. russia is also a member of the OPEC+ group.
Trump has publicly called on OPEC and its leading member, Saudi Arabia, to lower oil prices, saying that this would end the war in Ukraine. He has also developed a program to maximize oil and gas production in the United States, which is already the largest in the world.
Oil falls amid Trump's renewed call for OPEC to cut prices27.01.25, 09:58
However, analysts believe that a price war between the US and OPEC+ is unlikely, as it could harm both sides.
"A price war with the US would see OPEC+ producers maximize their output to drive down prices and cause shale production to fall," analysts at BMI, a division of Fitch Group, said in a note.
They predict that Brent crude oil prices could fall below $50 as OPEC+ could use more than 5 million barrels of oil per day in its reserve capacity, which would lead to a drop in US shale oil production along with prices.