Lagos — Crude oil futures showed little movement before the U.S. trade policy statement, with traders being watchful pending insights into potential tariff impacts on crude consumption. Reduced trading activity because of uncertainties surrounding worldwide demand projections might result in volatile price swings.
A confrontational tariff strategy might slow down economic expansion and reduce crude usage, which could depress pricing. On the other hand, adopting a balanced tactic may avoid a significant downturn and provide steadiness to oil costs.
The situation becomes even more complex due to the U.S. government's emphasis on additional tariffs aimed at Russian petroleum and the escalation of penalties imposed on Iran. There is also an increased possibility that political strains could interfere with supplies, introducing an element of uncertainty.
On the contrary, increasing stocks of U.S. crude might influence investor mood. Although worries about excess supplies could put downward pressure on prices, interruptions in supply caused by sanctions might mitigate some of these negative effects. Additionally, the market’s response could be influenced by further inventory reports released by the EIA later today.
In the meantime, sanctions imposed on Venezuela’s oil industry have intensified worries about supplies, leading to considerable cuts in exports. Such actions might further constrain the global supply, offering some backing to crude prices.
*Lixing, Financial Market Strategy Advisor for Exness