Oil Steadies After Biggest Gain in Weeks, Trump Tariffs Weigh
Oil prices stabilized after their largest weekly gain in nearly a month, as concerns over tighter Russian crude supplies offset uncertainty surrounding President Donald Trump's escalating tariffs.
Brent futures hovered around $76 a barrel after surging 1.6% on Monday, while West Texas Intermediate traded above $72 following a two-day rally. Russian production data revealed a further decline below the nation's OPEC+ quota last month, according to individuals with knowledge of the figures.
Crude markets have fluctuated dramatically this year, initially buoyed by a surge in heating demand amid a frigid Northern Hemisphere winter and U.S. sanctions on Russian oil exports. However, prices have retreated over the past three weeks as Trump's tariff regime has raised the specter of trade wars on multiple fronts.
The U.S. president recently imposed a 25% tariff on all aluminum and steel imports, including from Canada and Mexico, the United States' top foreign suppliers. The levies are scheduled to take effect on March 4, and Trump has indicated they "may go higher" in an effort to bolster domestic production.
"Modeling the impact of the tariffs remains a significant challenge given our limited knowledge," said Chris Weston, head of research at Pepperstone Group Ltd. "However, a combination of short-covering and genuine buying suggest we may have reached a short-term low."
Trump has also urged Israel to reconsider its ceasefire agreement with Hamas if hostages are not returned by the weekend, potentially escalating hostilities. Both parties have accused each other of violating the terms of the deal.
Tightness is evident in certain market segments, particularly in the Middle East, where reduced competition from other sources has allowed regional producers to increase prices for Asian customers. In Europe, soaring natural gas prices have made oil a more cost-effective fuel, potentially boosting demand.