Oil Steadies Amid Tariff Concerns and Stockpile Outlook
Oil prices remained stable as traders assessed the potential impact of President Trump's proposed tariffs on imports from key crude suppliers, including Canada, and the outlook for global inventories.
Brent crude hovered above $77 per barrel, extending a modest gain from Tuesday. West Texas Intermediate (WTI) traded near $74. White House press secretary Karoline Leavitt confirmed that tariffs on Canada, Mexico, and China would take effect on February 1. Canada accounts for over half of US crude imports.
Stockpiles also remained under scrutiny. According to sources familiar with the American Petroleum Institute's (API) assessment, US commercial inventories increased by 2.86 million barrels last week. If confirmed by official data on Wednesday, this would mark the first inventory gain in 10 weeks.
Oil prices have faced volatility in recent months, initially rising due to US sanctions on Russia and cold weather but later falling on concerns about a trade war and weak economic data from China. President Trump has urged OPEC+ to reduce crude prices, hoping to pressure Russia to end the Ukrainian conflict.
Despite these headwinds, market indicators suggest ongoing tightness in the oil market. WTI's prompt spread, indicating the difference between its nearest contracts, remained in backwardation at 85 cents per barrel. This bullish pattern contrasts with a spread of around 40 cents a month ago.