Wednesday12 February 2025
podrobnosti.org.ua

Oil prices are falling as the U.S. suspends tariffs on Mexico and Canada.

Oil prices fell on Tuesday, February 4, as U.S. President Donald Trump announced a one-month suspension of the decision to impose high tariffs on Mexico and Canada, the largest foreign oil suppliers to the United States.
Нефть дешевеет на фоне приостановления США пошлин для Мексики и Канады.

As reported by Ukrinform, this information comes from Reuters.

Brent futures dropped by 50 cents, or 0.7%, to $75.46 per barrel, while American oil West Texas Intermediate (WTI) fell by 89 cents, or 1.2%, to $72.27.

Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum announced that they agreed to strengthen border protection efforts in response to Trump's demand to combat immigration and drug smuggling. This will lead to a 30-day suspension of the 25% tariffs on energy imports from Canada, which were set to take effect on Tuesday.

“The dominant theme in global markets has been U.S. tariffs,” noted IG market strategist Yeap Jun Rong. While the tariff delay for Mexico and Canada allowed for improved risk sentiment and contributed to the strengthening of the U.S. dollar, oil prices attempted to recover, he added.

The Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, discussed Trump’s call for increased production on Monday but agreed to stick to their policy of gradually increasing oil output starting in April.

However, ING analysts warn that Canada will remain vulnerable to trade wars unless it expands its export capabilities beyond the United States by establishing more pipelines from oil fields to ports. “Building such infrastructure will take several years, but it will provide Canadian producers with greater flexibility and the potential for more destinations for Canadian oil,” said ING.

Additionally, investors will be awaiting weekly data on oil inventories in the U.S. Analysts surveyed by Reuters expect crude oil stocks to rise, while gasoline and distillate inventories are likely to decline. Crude oil inventories in the U.S. are expected to increase by 10.8 million barrels for the week ending January 31, while gasoline stocks are likely to rise by 500,000 barrels, said Macquarie energy strategist Walt Chancellor.