Oil markets are facing downward pressure as President Donald Trump announced a delay in tariffs on Mexico and Canada, easing trade tensions and reducing uncertainty in North American oil trade. This move aligns with Trump's preference for affordable conventional energy, and while tariffs on China remain a possibility, upcoming talks may influence future decisions. The focus now shifts to the global crude market's fundamentals, which appear weak due to several factors.
OPEC+ is poised to gradually reintroduce its spare capacity starting in the second quarter, potentially leading to an oversupply in the market. Additionally, China's tepid demand for oil imports continues to weigh on global prices, as the world's largest importer shows signs of reduced purchasing. Meanwhile, Russia, despite facing sanctions, is managing to keep its oil exports flowing, further contributing to the global supply glut.
As of 20:01 on February 3, the price of crude oil stands at $72.28, down from its last close of $73.16. The market's soft tone reflects the combined impact of eased trade tensions, OPEC+'s production plans, and ongoing supply from Russia, all of which are contributing to the current price dynamics.