Oil Dips Amidst Trade War and Russian Sanctions
West Texas Intermediate (WTI) settled below $76 a barrel, fluctuating throughout Wednesday's session due to concerns over escalating trade conflicts and the impact of US sanctions on Russia.
Trade War Jitters
President Donald Trump's threat to impose tariffs on China and the EU, major energy markets, has fueled bearish sentiment in oil markets. The threat follows plans to levy tariffs on Canada and Mexico, key crude suppliers to the US. The potential for Canadian oil tariffs could flood the US market with crude, leading to lower prices.
Russian Sanctions
Meanwhile, traders continue to analyze the impact of comprehensive sanctions on Russian oil. Indian Oil Corporation anticipates a supply loss of up to 2 million barrels per day, driving up the value of Dubai crude. Trump has indicated additional penalties on Russia if negotiations over Ukraine fail.
2023 Outlook
Despite recent declines, crude remains higher year-to-date, supported by Russian sanctions and severe winter weather in the northern hemisphere. However, analysts caution that the bullish momentum may be unsustainable due to transient factors.
WTI's 200-day moving average has provided temporary support, limiting losses.