Oil Level Steady as US Trade Policy Clarity Awaited
Oil prices remain stable as investors seek clarity on the Biden administration's trade policy plans. Commerce secretary nominee Howard Lutnick suggests Canada and Mexico may avoid tariffs if they address illegal migration and fentanyl concerns.
Brent crude trades above $76, while West Texas Intermediate hovers around $73, despite recent inventory build-ups. Amidst the uncertainty, the Bank of Canada has lowered interest rates, citing lack of clarity on US actions and potential consequences.
Canada, a significant exporter of crude to the US, faces potential tariffs starting February 1st. The US administration has also threatened tariffs against China and Colombia.
Mexico has reportedly prepared a strategy to mitigate the impact of potential tariffs. The US and Mexico share a closely integrated oil market, with Midwest refiners heavily reliant on Canadian imports.
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