Oil Prices Little Changed as Market Balances China Tariffs & Iran Risks

Image Credit: CNBC

Oil prices remained largely unchanged on Wednesday following a volatile session the day before, as investors downplayed the effects of China's tariffs on U.S. energy imports. However, President Donald Trump’s renewed push to halt Iranian crude exports provided some support.  

By 0210 GMT, Brent crude futures slipped 18 cents (0.24%) to $76.02 per barrel, while U.S. West Texas Intermediate (WTI) crude dropped 9 cents (0.12%) to $72.61.  

On Tuesday, oil prices fluctuated significantly, with WTI plunging as much as 3%—its lowest since December 31—after China imposed tariffs on U.S. oil, liquefied natural gas, and coal in response to U.S. trade levies. However, prices rebounded when Trump reinstated his "maximum pressure" campaign on Iran, aimed at restricting its nuclear program and reducing its crude exports to zero, as seen during his first term.  

Goldman Sachs analysts noted that the impact of China’s tariffs on global energy prices would be minimal, as they do not alter overall supply and demand. Both nations are expected to find alternative markets for their commodities.  

Despite Trump expressing openness to discussions with Iran’s leadership when signing the order to reinstate sanctions, analysts from ANZ estimated that the policy could impact approximately 1.5 million barrels per day of Iranian oil exports, based on ship tracking data.  

Meanwhile, rising crude and fuel inventories in the U.S., the world's largest oil consumer, also weighed on prices. Data from the American Petroleum Institute (API) revealed a crude stock increase of 5.03 million barrels for the week ending January 31. Gasoline inventories grew by 5.43 million barrels, while distillate stocks declined by 6.98 million barrels.  

The official U.S. government oil inventory report is expected to be released later on Wednesday.

 

 

Paraphrasing text from "Reuters" all rights reserved by the original author.