Oil Prices Decline as Trump Delays Tariffs
Oil prices fell after President Donald Trump postponed tariffs on Canada and Mexico by a month. The delay comes after the countries agreed to strengthen measures to combat migration and drug trafficking.
Brent crude futures dropped towards $75 a barrel, while West Texas Intermediate futures traded near $72. Tariffs on China are still scheduled to take effect, but Trump indicated his administration would engage in discussions with Beijing, potentially leading to a reprieve.
"The oil market volatility reflects the policy uncertainty introduced by the Trump administration," said Charu Chanana, chief investment strategist for Saxo Markets Pte in Singapore. "Oil fundamentals are secondary to sentiment with tariffs playing a crucial role in price direction."
Earlier this year, futures rallied on cold weather and US sanctions on Russia. However, gains have eroded since Trump's inauguration and the threat of global growth-dampening tariffs.
Demand concerns persist as manufacturing activity in China, the world's largest crude importer, unexpectedly declined for the second consecutive month in January.
Despite calls from Trump to increase production to lower prices, OPEC and its allies maintained existing output plans at a meeting on Monday. The group will continue production cuts this quarter, followed by gradual increases from April.