Oil Prices in Steady Decline Amid Trade Tensions
Oil prices have found a degree of stability near their lowest levels in six months, primarily influenced by extensive tariffs imposed by President Donald Trump as part of his trade war strategy, which has raised alarms about future energy demand.
West Texas Intermediate crude is currently trading around $67 per barrel following a decline exceeding 5% over the past four trading sessions, while Brent crude has closed below the $70 mark.
In light of these developments, Trump is considering postponements on certain tariffs affecting auto manufacturers and potential exemptions for select agricultural products. However, he remains committed to implementing reciprocal tariffs by April 2.
Since mid-January, oil prices have plummeted nearly one-fifth, a situation catalyzed by the ripple effects of Trump’s trade policies on global markets, prompting countermeasures from major trading partners like Canada and China against American goods.
The OPEC+ alliance has also indicated plans to resume production cuts in April, thereby increasing downward pressure on oil prices.
On the U.S. Gulf Coast, refiners have adjusted their crude oil procurement strategies, notably reducing imports from Mexico, which is expected to announce its response to Trump’s tariffs shortly.
In Canada, the Prime Minister of Alberta has signaled an intention to construct pipelines that would facilitate greater oil exports to Asia and Europe, aiming to mitigate the impact of trade tensions.
Against this backdrop, several analysts have begun to revise their price projections. Morgan Stanley has lowered its Brent crude price forecasts for the remainder of the year, suggesting it could trade within the $60 range during the second half of the year.
The evolving dynamics of the oil market, shaped by geopolitical concerns and shifting supply-demand fundamentals, will continue to influence price trajectories in the coming months.
