Oil Prices Experience Minor Decline Amid Trade Tensions
Oil prices experienced a slight downturn during trading on Thursday, attributed to growing concerns regarding trade actions involving the United States and its primary crude oil suppliers, Mexico and Canada.
White House Press Secretary Caroline Levitte indicated earlier in the week that President Donald Trump remains committed to his previous assertion of imposing tariffs on goods from Canada and Mexico, with the potential implementation scheduled for Saturday.
In related developments, Howard Lottenic, Trump’s nominee for Secretary of Commerce, suggested that Canada and Mexico could avert these tariffs by taking immediate action to secure their borders against the influx of fentanyl.
From a monetary policy perspective, the U.S. Federal Reserve maintained the federal funds rate at its current level during a meeting concluded on Wednesday, aligning with market expectations. However, President Trump expressed discontent with this decision, accusing the Federal Reserve Chairman of contributing to inflationary pressures.
In terms of supply and demand dynamics, recent data from the U.S. Energy Information Administration (EIA) revealed an increase in U.S. crude oil inventories, which rose by 3.46 million barrels in the previous week. This uptick coincided with a continued reduction in refinery activity for the third consecutive week.
Market participants are keenly awaiting the upcoming meeting of the Joint Ministerial Monitoring Committee of OPEC+, scheduled for February 3. This group, which includes members of the Organization of the Petroleum Exporting Countries (OPEC) as well as allied producers such as Russia, is expected to consider strategies for increasing production commencing in April.
As for market performance, Brent crude futures were down 0.2%, trading at $76.43 per barrel, while U.S. crude contracts settled at $72.59 per barrel.
Market | Price per Barrel | Change |
---|---|---|
Brent Crude | $76.43 | -0.2% |
U.S. Crude | $72.59 | N/A |