Oil prices have rebounded after experiencing significant volatility at the start of the year. Factors influencing the price movements include tightening Russian crude supply, concerns over escalating trade tensions due to President Trump's tariffs, and potential demand boosts from Europe's surging natural gas prices and the Middle East's market dynamics.
Oil prices have stabilized after a significant surge, marking their largest gain in nearly a month. This rebound comes amidst tightening Russian crude supply, which has outweighed concerns over escalating trade tensions stemming from President Donald Trump's expanding tariffs. West Texas Intermediate (WTI) crude oil traded above $72 per barrel, experiencing an almost 2 percent increase on Monday.
Meanwhile, Brent crude closed higher for the second consecutive session, hovering around $76 per barrel. According to sources familiar with the data, production in Russia last month fell further below the nation's OPEC+ quota, indicating a potential supply constraint. The year has seen volatile price movements for oil. Initially, prices climbed due to heightened heating demand during a cold winter in the Northern Hemisphere and U.S. sanctions imposed on Russia's energy sector. However, prices have declined over the past three weeks as Trump's tariff policies have fueled apprehensions about trade wars on multiple fronts. The latest move by the U.S. president involves imposing a 25 percent tariff on all aluminum and steel imports into the United States, affecting even Canada and Mexico, the country's top two suppliers. These tariffs are set to take effect on March 4, and Trump has indicated that they could potentially be raised further, aiming to stimulate domestic production. Adding to the geopolitical uncertainty, Trump has also pressured Israel to terminate its ceasefire agreement with Hamas if hostages are not released by the weekend. Both sides have accused each other of breaching the terms of the truce, raising the risk of renewed conflict. Despite the global headwinds, certain segments of the oil market exhibit signs of tightness. Notably, the Middle East has witnessed a broader reduction in competing oil flows, empowering producers in the region to increase prices for their key Asian customers. Furthermore, soaring natural gas prices in Europe have made oil a more economically viable energy source, potentially leading to an uptick in demand.
OIL PRICES RUSSIAN SUPPLY TARIFFS ENERGY MARKET GLOBAL TRADE
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