Crude Oil Soars as Trump Extends Tariff Deadline, Lowers Duty

Brent crude futures for April increased yesterday by 54 cents or 0.7 per cent to $76.54 per barrel and the US West Texas Intermediate (WTI) crude rose by 73 cents or 1 per cent to $73.48 a barrel.

For the week, the Brent and WTI benchmarks declined by 2.1 per cent and 2.9 per cent lower, respectively, marking the second straight week of losses as the markets expect the proposed tariffs would drive up fuel prices for Americans and hit global economic growth and demand for energy.

A tariff on oil imports could lead to lower fuel production at those facilities and drive up consumer costs.

Mr Trump had previously threatened a 25 per cent tariff on Canadian and Mexican exports to the US on February 1 and had not clarified if oil and gas would be exempt.

Canada and Mexico are the two largest crude oil exporters to the US. In its case, Canada sends 75 per cent of all its goods and services exports to the US and the economy would be badly hit by the promised tariffs.

The Prime Minister of Canada, Mr Justin Trudeau, said on Friday his country would respond immediately and forcefully if the US goes ahead with a threat to impose tariffs, warning Canadians that they could be facing tough times.

The market is also awaiting the meeting of the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) scheduled for Monday.

OPEC+ is unlikely to alter plans to raise output gradually when it meets on Monday despite Trump urging OPEC and its de facto leader, Saudi Arabia, to lower prices.

This comes as US crude stockpiles posted a larger-than-expected increase. The latest data from the Energy Information Administration (EIA) revealed a build of 3.5 million barrels.

The rise was attributed to lower refinery output, partially caused by winter storms disrupting operations.