Economy Update – Baghdad
On Wednesday, oil prices experienced a decline following a day of fluctuations, as investors largely overlooked the implications of new Chinese tariffs on U.S. energy imports. However, renewed efforts by President Donald Trump to curb Iranian crude oil exports lent some support to the market.
Brent crude futures decreased by 37 cents, or 0.45 percent, settling at $75.83 per barrel by 03:22 GMT.
West Texas Intermediate (WTI) crude dropped by 28 cents, or 0.39 percent, to $72.41.
Trading on Tuesday saw significant volatility, with WTI crude falling by 3%, marking its lowest point since December 31, following China’s announcement of tariffs on U.S. oil and liquefied natural gas imports in response to American tariffs on Chinese goods.
Subsequently, prices rebounded as Trump reinstated a “maximum pressure” strategy aimed at reducing Iran’s nuclear capabilities, a campaign initiated during his first term, which led to a dramatic decline in Iranian crude oil exports.
An analysis noted that the fundamental dynamics of global demand for these essential commodities are unlikely to be altered by the imposition of Chinese tariffs.
The report indicated that both the U.S. and China could seek alternative markets for their oil, mitigating the potential impact of tariff-related disruptions.
Trump expressed a willingness to negotiate with Iran and noted his readiness to engage with the Iranian leadership when he reaffirmed his administration’s stringent policies on Iran. Analysts suggest that this may affect approximately 1.5 million barrels per day of Iranian oil exports, according to maritime tracking data.
Additionally, oil prices were pressured by rising crude and fuel stockpiles in the United States, the world’s largest oil consumer.
Crude inventories surged by 5.03 million barrels in the week ending January 31, based on reports from the American Petroleum Institute.
Gasoline inventories climbed by 5.43 million barrels, while stockpiles of distillates decreased by 6.98 million barrels, also according to the American Petroleum Institute.
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