Economy News – Follow-up
Oil prices experienced a rebound in early trading on Friday, poised to halt a three-week streak of declines. This uptick is attributed to heightened demand for fuel and expectations surrounding US President Donald Trump’s proposed universal customs duties, which are not projected to take effect until April, thus providing a window for avoiding a trade conflict.
Market Overview
As of 0300 GMT, Brent crude futures saw an increase of 19 cents, reaching $75.25 a barrel, while US West Texas Intermediate (WTI) crude futures grew by 12 cents to $71.41.
Throughout the week, Brent crude has appreciated by 0.7%, with WTI following suit with a 0.5% increase, based on the latest data.
Analysts at J.P. Morgan reported that global oil demand has surged to 103.4 million barrels per day, reflecting an annual increase of 1.4 million barrels per day. They noted, “Following a temporary slowdown in demand for fuel used in transportation and heating, we observed a recovery in the second week of February, signaling a potential alignment of actual and anticipated demand in the near future.”
They added, “The consumption of heating fuel is expected to rise again, driven by high gas prices in Europe which may incentivize a shift from gas to oil, thereby bolstering demand.”
Trade Policy Implications
On Thursday, President Trump directed trade and economic officials to evaluate the imposition of customs duties on nations that levy tariffs on American products and tasked them with providing their recommendations by April 1.
Moreover, discussions surrounding a possible peace agreement between Russia and Ukraine have fostered expectations for enhanced global energy supplies, with the potential for sanctions against Moscow to be lifted.
Trump also urged US officials this week to initiate talks aimed at ending the conflict in Ukraine, following expressions of peace from both Russian President Vladimir Putin and Ukrainian President Volodymyr Zelensky during separate phone conversations with Trump.
International Insights
In its latest evaluation of the oil market, the International Energy Agency indicated that Russian oil exports could persist should alternative strategies be identified to counter recent US sanctions, noting a slight uptick in Russian crude production last month.
As the third-largest oil producer globally, Russia’s oil exports have been significantly impacted by sanctions imposed following its involvement in the Ukraine conflict nearly three years ago, contributing to elevated price levels.
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