Oil Prices Edge Up Amid Tariff Concerns and Mixed Market Signals
Oil prices rebounded slightly this week, reversing a three-week losing streak, as markets assessed the implications of ongoing trade tensions.
Brent crude traded near $75 a barrel, while West Texas Intermediate (WTI) surpassed $71. The rebound was driven by concerns over the impact of President Donald Trump's tariff actions, which have roiled global markets.
Chinese tariffs on U.S. goods are expected to take effect on Monday, retaliating against Trump's tariffs imposed last week. The U.S. president has also threatened additional tariffs on aluminum and steel, which would affect global energy companies, including oil drillers.
Despite the upward trend, market indicators suggest weakness. Timespreads, which measure near-term supply tightness, have declined, indicating a potential surplus. Speculators have increased their bearish bets on WTI, reflecting concerns about weakened demand.
"The market has been primarily focused on the negative demand outlook due to escalating trade tensions," said Soni Kumari, a commodity strategist at ANZ Group Holdings. However, she noted that Trump's policies could continue to support oil prices through potential sanctions expansions on Russia and Iran.
Overall, the market remains volatile as investors weigh the competing factors of trade tensions, geopolitical risks, and supply dynamics.