OIL prices were steady yesterday but on course for weekly declines as markets waited to see if US President Donald Trump will follow through on his threat to impose tariffs on Mexico and Canada today.
Brent crude futures for March, which expired yesterday, were down 9 cents at $76.78 a barrel. US West Texas Intermediate crude declined 2 cents to $72.71.
For the week, the Brent and WTI benchmarks were set for declines of 2.2 per cent and 2.6pc respectively.
Oil came under pressure from the potential negative economic impact of US tariffs against Canada, Mexico and China, said PVM analyst Tamas Varga, adding that potential dollar appreciation as a result of tariffs also weighed on oil.
Trump has threatened to impose a 25pc tariff on Canadian and Mexican exports to the US if those two countries do not clamp down on shipments of fentanyl and on illegal migration across US borders.
Canada and Mexico are the two largest crude oil exporters to the US, but it is unclear if oil would be included among the tariffs. Trump said on Thursday he would soon decide whether to exclude Canadian and Mexican oil imports from the tariffs.
Tariffs would likely result in large US refinery run cuts, said Energy Aspects analyst Livia Gallarati.
“Our base case has been that, if tariffs are announced, they will include a grace period for negotiations and that oil is likely eventually to be carved out from any tariffs,” Gallarati added.
The market is also awaiting the Opec+ meeting scheduled for Monday.
Kazakhstan’s energy minister said on Wednesday that the group is set to discuss Trump’s plans to raise US oil production and take a joint stance on the matter at next week’s Opec+ meeting.
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