Oil Prices Steady Amid Trade War Concerns and Supply Uncertainty

Highlights:

• Brent crude and WTI remain near their lowest levels of the year amid trade war concerns.
• Oil prices have dropped 3% in two sessions, heading for the biggest monthly loss since September.
• Sanctions on Iran and OPEC+ production decisions could influence future price movements.

Oil prices have stabilized near their lowest levels of the year, as concerns over U.S. tariff threats and supply dynamics continue to influence the market. Brent crude was trading below $73 per barrel at the time of writing, following a 3% decline over the previous two sessions, while West Texas Intermediate (WTI) hovered near $69 per barrel.

Trade Tensions Impact Market Sentiment

Uncertainty surrounding trade policies has contributed to volatility in the oil market. U.S. President Donald Trump reaffirmed plans to impose tariffs on Mexico and Canada, stating that they were "not stopping," although he did not specify a timeline. Additionally, the European Union could also face levies, further fueling concerns over global economic growth and energy demand.

Biggest Monthly Drop Since September

Oil is on track for its most significant monthly decline since September, as fears of a slowing global economy outweigh supply-side risks. Despite U.S. sanctions against Iran, which could tighten the market, the possibility of a delayed OPEC+ production increase has not been enough to offset bearish sentiment.

Looking Ahead

The Trafigura Group has identified stricter sanctions on Iran as a potential factor that could drive oil prices higher. However, with OPEC+ likely to postpone ramping up production, supply constraints could eventually push prices back up. For now, trade uncertainty remains the dominant force shaping market trends.

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