Oil Steady as Market Weighs Tariffs, Inventory Outlook
Oil prices remained stable as traders assessed the potential market impact of President Donald Trump's proposed tariffs on crude imports from Canada and other major suppliers, as well as the outlook for stockpiles.
Brent crude hovered above $77 per barrel, while West Texas Intermediate (WTI) was near $74. White House Press Secretary Karoline Leavitt confirmed that tariffs on Canada, Mexico, and China will take effect on February 1. Canada accounts for over half of US crude imports.
Inventory data was also a focus. According to sources familiar with the American Petroleum Institute's (API) assessment, US commercial crude stocks increased by 2.86 million barrels last week. If confirmed by official data on Wednesday, this would mark the first increase in ten weeks.
Crude has experienced volatility this year, with US sanctions against Russia and frigid temperatures initially driving prices higher. However, concerns about the impact of a trade war on energy demand and weak economic data from China subsequently weighed on prices.
In addition to imposing tariffs, President Trump has urged OPEC+ to lower crude prices, in part to pressure Moscow to end the war in Ukraine. Despite these developments, key market metrics continue to indicate underlying tightness in the market. WTI's prompt spread, indicating the difference between its two nearest contracts, is in backwardation at 87 cents per barrel, reflecting a bullish market outlook.