Oil prices remained largely unchanged on Thursday as markets awaited a possible tariff announcement from U.S. President Donald Trump on Mexico and Canada, the U.S.’s largest crude oil suppliers, while also preparing for an upcoming OPEC+ meeting.
Brent crude futures saw a slight dip, down 7 cents, or 0.09%, at $76.51 per barrel by 0738 GMT. Meanwhile, U.S. crude futures edged up by 2 cents, or 0.03%, to $72.64. U.S. crude had settled at its lowest price this year on Wednesday.
Trump’s intention to impose tariffs on Canada and Mexico remains, with White House spokeswoman Karoline Leavitt confirming the plan for Saturday. Trump’s nominee to lead the Commerce Department, Howard Lutnick, stated that the tariffs could be avoided if Canada and Mexico take swift action to close their borders to fentanyl, while also focusing on slowing China’s advancements in artificial intelligence.
Analyst Tony Sycamore from IG Market does not foresee significant impacts on oil markets from the tariffs, as traders have already priced in the potential move, which he sees as contributing to the current oil price levels.
On the demand side, crude oil stockpiles in the U.S. rose by 3.46 million barrels last week, in line with analysts’ estimates, as winter storms curtailed demand.
Regarding supply, crude oil exports from Russia’s western ports are expected to fall by 8% in February, due to increased refining and U.S. sanctions, which have affected Russian crude exports.
The oil market is also awaiting a ministerial meeting of OPEC+ producers scheduled for February 3, with discussions anticipated on how to approach Trump’s push for increased U.S. oil production. Trump has urged OPEC, particularly Saudi Arabia, to lower oil prices in an attempt to end the Ukraine conflict.
Despite potential tensions between the U.S. and OPEC+, analysts believe a price war is unlikely, as both sides would be negatively affected. Some analysts at BMI predict that a price war could push Brent crude prices below $50, as OPEC+ could utilize over 5 million barrels per day of spare capacity, potentially reducing U.S. shale oil production and lowering prices.
