Oil prices climb despite trade war concerns
Summary
Trump to announce 25% steel and aluminium tariffs on Monday
China responds with retaliatory tariffs on some US exports
Trump says he's making progress with Putin to end Ukraine war
HOUSTON, Feb 10 (Reuters) - Oil prices rebounded on Monday after posting their third straight week of losses, even though investors remained worried that U.S. President Donald Trump might start a trade war.
Brent crude futures were up $1.30, or 1.7%, at $75.96 a barrel by 11:51 a.m. ET (1651 GMT) . U.S. West Texas Intermediate crude added 1.9%, rising $1.36 to $72.36. The gains could have been bargain hunting after prices fell 2.75% last week, pressured by global trade worries.
"It's tariff uncertainty which is the name of the game. This affects risk appetite in general and has spillover effects into oil," said Harry Tchilinguiran at Onyx Capital. "After last week's declines, some people may be buying into the dip."
Also buoying prices, Russia's Federal Anti-Monopoly Service may initiate a one-month ban on gasoline exports by large producers in order to stabilize wholesale prices ahead of the crop-sowing season, state news agency TASS reported on Friday.
"Tighter supplies of exported Russian crude and gasoline has Middle East cash crude prices moving higher in the early trade today," said Dennis Kissler, senior vice president of trading at BOK Financial.
Trump said he will announce on Monday 25% tariffs on all steel and aluminium imports into the U.S.
A week ago he announced tariffs on Canada, Mexico and China, but suspended those for the neighbouring countries the next day.
Tariffs could dampen global economic growth and energy demand.
"The market has realized tariff headlines are likely to continue in the weeks and months ahead," said IG analyst Tony Sycamore, adding that there was an equal chance they could be walked back or even increased at some point in the near future.
"So perhaps investors are coming to the conclusion it's not the best course of action to react negatively to every headline."
China's retaliatory tariffs on some U.S. exports are due to take effect on Monday, with no sign yet of progress in talks between Beijing and Washington.
Oil and gas traders are seeking waivers from Beijing for U.S. crude and liquefied natural gas (LNG) imports.
Trump said on Sunday that the U.S. is making progress with Russia to end the Ukraine war. Russia's point man for relations with the U.S. said on Monday that all of President Vladimir Putin's conditions must be met in full before the war can end.
Sanctions imposed on Russian oil trade on January 10 disrupted Moscow's supplies to its top clients, China and India.
Washington also stepped up pressure on Iran last week, with the U.S. Treasury imposing new sanctions on a few individuals and tankers that help to ship Iranian crude oil to China.
"These sanctions on Iran and Russia, they are biting. This is tightening the market," said SEB analyst Bjarne Schieldrop. Rising natural gas prices are also contributing to oil price gains by boosting demand for cheaper fuels, he added.
Brent crude is forecast to average $60 to $65 a barrel in the second half of 2025 because Trump will be persistent in his desire to lower energy prices and he will ultimately prove to be a bearish influence on the market, Citi analysts said.
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