Oil Prices Edge Higher Amid Trade Policy Uncertainty

Highlights:

• Oil Prices Rise: West Texas Intermediate (WTI) crude rose toward $73 per barrel as investors await clarity on US trade policies, with Brent crude ending near $77.
• Trade Policy Uncertainty: Donald Trump’s commerce secretary nominee, Howard Lutnick, suggested Canada and Mexico might avoid tariffs if they take action on illegal migration and fentanyl.
• US Stockpile Impact: A rise in US stockpiles earlier this week helped drive futures to the lowest close of the year, contributing to market volatility.

Investors Await US Administration's Next Move

Oil prices saw a slight increase as investors awaited clarity on the US administration’s plans for future trade policies. At the time of writing, West Texas Intermediate (WTI) crude oil rose toward $73 per barrel, following a boost from a rise in US stockpiles earlier this week. This price action comes after futures reached their lowest close of the year.

Trade Policy and Potential Tariffs on Canada and Mexico

The market’s uncertainty stemmed from remarks made by Howard Lutnick, Donald Trump’s nominee for commerce secretary, who suggested that Canada and Mexico could avoid tariffs if they took action on critical issues such as illegal migration and the flow of fentanyl. His comments ignited discussions over the potential trade penalties, which were previously expected to be implemented this weekend.

Impact of US Stockpiles and Brent Crude Performance

Brent crude oil also saw gains, ending the session near $77 per barrel. Despite the rise, investors remained cautious as the market awaited further direction from the US administration on the evolving trade situation. The climb in US stockpiles on Wednesday played a role in the market's recent volatility, with traders keeping a close eye on any new developments that might influence price trends in the coming days.

At the time of writing, the outlook for oil remains uncertain as traders balance geopolitical risks with supply-demand fundamentals. With US trade policy decisions on the horizon, market participants are bracing for the next shift in oil prices, which could have a significant impact on global energy markets.

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