OIL prices inched higher yesterday after threats by US President Donald Trump to impose secondary tariffs on Russian crude and attack Iran, though worries about the impact of a trade war on global growth capped gains.
Brent futures rose 21 cents, or 0.3 per cent, to $74.98 a barrel early yesterday while US West Texas Intermediate crude futures climbed 22 cents, or 0.3pc, to $71.70. The contracts settled at five-week highs a day earlier.
“Near-term risks are skewed to the upside, with US threats of secondary tariffs on Russian and Iranian oil leading market participants to price for the risks of tighter oil supplies,” said Yeap Jun Rong, market strategist at IG. However, broader themes still revolve around concerns of upcoming tariffs weighing on global demand, along with prospects of increased supply from Opec+ and the US, said Yeap.
A Reuters poll of 49 economists and analysts in March projected that oil prices would remain under pressure this year from US tariffs and economic slowdowns in India and China, while Opec+ increases supply.
Slower global growth would dent fuel demand, which might offset any reduction in supply due to Trump’s threats.
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