Oil Holds Steady as Investors Await Clarity on US Trade Policy
Oil prices remained relatively stable as investors await further developments regarding US trade policy. The potential for high tariffs on Canada and Mexico, the United States' top crude suppliers, has been a major concern in the market.
However, comments from Howard Lutnick, a close advisor to President-elect Donald Trump, have provided some optimism. Lutnick suggested that Canada and Mexico could avoid tariffs if they address issues such as illegal migration and fentanyl.
Brent crude traded near $76 a barrel. The price of Canadian crude has been volatile, but has recovered some ground since Lutnick's comments. Mexico is the second-largest supplier of crude to the US.
The oil market has experienced turbulence in the past year, with initial gains due to cold weather and sanctions against Russia being offset by concerns about economic growth.
"Growth numbers from Europe were not great," said Giovanni Staunovo, a commodity analyst at UBS Group AG. "Growth concerns are not helping crude."
In addition to the tariff threat, traders have been active in Middle Eastern oil markets due to sanctions on Russia. Open interest on the Brent-Dubai spread traded on ICE futures exchange recently reached a record high.