The oil market is experiencing a softening trend as President Donald Trump announced a delay in tariffs on Mexico and Canada, reducing immediate import costs and uncertainties. This move aligns with Trump's preference for affordable conventional energy, suggesting a strategic approach to managing oil prices through tariff adjustments. Meanwhile, the threat of tariffs on China persists, although negotiations are on the horizon.
The global crude market faces additional downward pressure due to OPEC+'s significant spare capacity, which is set to be incrementally reintroduced starting in the second quarter. China's weak demand for imports further exacerbates concerns of oversupply, while Russia's continued oil exports, despite sanctions, prevent any significant supply disruptions. These factors collectively contribute to a bearish outlook for oil prices.
As of 20:01 on February 3, the price of Brent crude oil (CO1) stands at $75.40, slightly down from its last close of $75.96. The market's focus remains on the interplay of geopolitical developments and fundamental supply-demand dynamics.