Oil: Price Steady as Market Considers Tariffs and Stockpiles
Traders are cautiously monitoring the potential implications of President Donald Trump's proposed tariffs on crude imports from Canada and other countries.
Brent crude remained above $77 a barrel on Wednesday, while West Texas Intermediate (WTI) hovered around $74.
White House press secretary Karoline Leavitt confirmed that tariffs on Canada, Mexico, and China will take effect on February 1, impacting more than half of US crude imports.
Meanwhile, US commercial crude inventories rose by 2.86 million barrels last week, according to the American Petroleum Institute (API). This potential increase, if confirmed by official data later Wednesday, would mark the first increase in 10 weeks.
Market dynamics have been volatile in 2023, with US sanctions on Russia and cold weather initially driving prices higher, but concerns over a potential trade war and China's economic weakness subsequently pulling them back.
Despite threats of tariffs, President Trump has urged OPEC+ to reduce crude prices as part of his efforts to pressure Moscow to end the war in Ukraine.
Technical indicators continue to indicate a relatively tight market. WTI's prompt spread, representing the difference between its two closest contracts, stood at 85 cents a barrel in backwardation, suggesting a bullish sentiment.