Oil prices continued their 5-week rise after Trump’s threats to Russia and Iran
1 April 08:58
On Tuesday, oil prices rose slightly after US President Donald Trump announced his intention to impose secondary tariffs on Russian oil and attack Iran. However, concerns about the impact of the trade war on global economic growth offset expectations from these statements and limited further growth. This was reported by "Komersant Ukrainian" with reference to Reuters.
Futures for Brent crude oil rose by 16 cents (0.2%) to $74.93 per barrel as of 05:30 Kyiv time, while futures for US West Texas Intermediate (WTI) rose by 13 cents (0.2%) to $71.61.
The day before, the contracts closed at their highest level in five weeks, so today a 5-week record was set again.
Trump’s bluff
After the news of Trump’s threats initially drove prices higher on Monday, traders said they viewed the US president’s warnings, at least regarding Russia, as a bluff.
On Sunday, Trump told NBC News that he was very angry with Russian President Vladimir Putin and would impose secondary tariffs of 25% to 50% on Russian oil buyers if Moscow tries to block efforts to end the war in Ukraine.
Tariffs on oil buyers from Russia, the world’s second-largest oil exporter, would disrupt global supplies and hurt Moscow’s largest customers, China and India.
Trump has also threatened Iran with similar tariffs and bombings if Tehran does not reach a deal with the White House on its nuclear program.
“At the moment, it looks like a threat from Russia and Iran. However, if it becomes a reality, it creates significant upside risks for the market, given the significant volumes of oil exports from both countries,”
– ING commodity strategy analysts said on Tuesday.
Читайте нас у Telegram: головні новини коротко
The situation in the United States
The market will be watching the weekly inventory data from the American Petroleum Institute, a US industry group, which will be released later on Tuesday, before official statistics from the Energy Information Administration on Wednesday.
Five analysts polled by Reuters estimated on average that U.S. crude stockpiles fell by about 2.1 million barrels in the week to March 28.
Meanwhile, a weaker dollar on Tuesday also supported the market. A weaker dollar favors oil demand, as it makes crude oil cheaper for those with other currencies.
The outlook
“Short-term risks are tending to increase as US threats of secondary tariffs on Russian and Iranian oil force market participants to consider the risks of a reduction in oil supplies,”
– said Yep Jun Rong, market strategist at IG.
However, as the expert added, the general trends still revolve around concerns about future tariffs that are weighing on global demand, along with the prospects for increased supply from OPEC and the United States.
A Reuters poll of 49 economists and analysts conducted in March forecasts that oil prices will remain under pressure throughout this year due to US tariffs and economic slowdowns in India and China, while OPEC will increase supply.
The slowdown in global growth could reduce demand for fuel, which could offset any reduction in supply due to Trump’s threats.
Читайте нас у Telegram: головні новини коротко
