Oil Rebounds After Weekly Declines Amid Tariff Fallout
Oil prices rebounded after a series of weekly drops as the market assesses the impact of ongoing tariffs imposed by President Donald Trump.
Brent crude traded near $75 per barrel after a third consecutive weekly decline, while West Texas Intermediate (WTI) hovered above $71. On Monday, China will implement tariffs on US goods in retaliation against Trump's levies enacted last week.
Trump has threatened additional tariffs on aluminum and steel for all countries, which could affect the US energy industry, particularly oil drillers that rely on specialty steel not available domestically. The timing of these tariffs remains uncertain.
Oil prices have declined since mid-January due to weak demand concerns and Trump's tariffs, overshadowing US sanctions on Russian and Iranian oil. Market indicators, such as timespreads, are also signaling a potential supply glut.
Speculators increased their bearish bets against WTI last week, the most since October, as Trump's tariff policies have rattled markets. Net long positions for WTI have declined for the second consecutive week, while Brent's have snapped a five-week gain streak.
"The market has been primarily focused on the demand weakness resulting from intensifying trade tensions," said Soni Kumari, commodity strategist at ANZ Group Holdings Ltd. However, she notes that "Trump's policies will continue to support oil," potentially due to the possibility of expanded sanctions on Russia and Iran.