Oil Prices Increase amidst Ongoing Trade Tensions
Oil prices increased in the global commodity market on Friday amidst ongoing trade tensions triggered by U.S President Donald Trump’s tariff threats.
The crude oil complex rebounded after three weeks of decline, driven by expectations of further US Federal Reserve (Fed) rate cuts, though ongoing tariff uncertainties, a strong US dollar, and rising jobless claims capped gains.
The U.S. and China trade war have raised fears of a global economic slowdown, potentially weakening oil demand.
Despite occasional upside price movements, the overall outlook remains cautious, with economic risks and trade uncertainties limiting significant oil price recovery, according to Zraimek Ceo Igoudar.
U.S. President Trump’s efforts to increase America’s oil production have heightened oversupply concerns, with rising crude inventories further pressuring prices.
Brent crude rose by 0.6%, trading at $74.57 per barrel while the US benchmark West Texas Intermediate (WTI) increased by 0.6%, reaching $70.82 per barrel, compared to its prior session close of $70.42.
Fed officials point to significant policy uncertainty during Trump’s administration as a key challenge in determining the direction of US monetary policy in the coming months.
Chicago Fed President Austan Goolsbee said that an economy with robust growth and declining inflation with full employment would allow the Fed to continue rate cuts, but warned that uncertainty about the impact of tariffs and other policy changes requires a slower approach.
In addition, Trump’s announcement to impose a 10% tariff on Chinese imports to improve the US trade balance and his decision to suspend the tariffs on Mexico and Canada for a month continues to impact oil prices.
Experts state that comprehensive tariffs will suppress oil prices in the short term, they may lead to a trade war in the long term, which could harm global growth, reignite inflation, and drive prices higher.
Meanwhile, the statements that the US administration will maintain its ‘strong dollar’ policy further support the decline in price and dampen the demand outlook among market players.
The US dollar index, which measures the US dollar’s value against other currencies, increased by 0.11% to 107.82.
‘We want the dollar to be strong. What we don’t want is other countries to weaken their currencies, to manipulate their trade,’ said US Treasury Secretary Scott Bessent.
In addition, according to data released on Thursday, the number of first-time jobless claims in the US rose by 11,000 last week to 219,000, exceeding market expectations.
This strengthened expectations of reduced demand in the world’s largest oil-consuming country, limiting the rise in prices. #Oil Prices Increase amidst Ongoing Trade Tensions Yield Declines as Investors Bullish on Nigerian Bonds
