Oil prices were little changed on Thursday as markets braced for threatened tariffs by U.S. President Donald Trump on Mexico and Canada, the two largest suppliers of crude oil to United States, and awaited a meeting of OPEC+ producers.
Brent crude futures were down 7 cents, or 0.1%, at $76.51 a barrel by 0411 GMT. U.S. crude futures were little changed at 2 cents up, or 0.03%, to $72.64. U.S. crude futures had settled at their lowest price this year on Wednesday.
Trump still plans to make good on his promise to impose tariffs on Canada and Mexico on Saturday, White House spokeswoman Karoline Leavitt told reporters on Tuesday.
Trump’s nominee to run the Commerce Department, Howard Lutnick, said on Wednesday that Canada and Mexico can avoid the tariffs if they act swiftly to close their borders to fentanyl, while vowing to slow China’s advancement in artificial intelligence.
On the demand front, crude oil stockpiles in the U.S. rose by 3.46 million barrels last week, roughly in line with analysts’ estimate for a rise of 3.19 million barrels, as winter storms that swept the country last week hit demand.
On the supply side, crude oil exports from Russia’s western ports in February are set to fall by 8% from the January plan as Moscow boosts refining, traders said and Reuters calculations showed, after the latest U.S. sanctions squeezed crude exports.
Investors are also looking ahead to a ministerial meeting by the Organization of the Petroleum Exporting Countries and its allies, together called OPEC+, scheduled for Feb. 3.
The OPEC+ group of leading oil producers is set to discuss Trump’s efforts to raise U.S. oil production and take a joint stance on the matter, Kazakhstan said on Wednesday. Russia is also a member of the OPEC+ group.
Trump has publicly called on OPEC and its leading member, Saudi Arabia, to lower oil prices, saying doing so would end the conflict in Ukraine. He has also set up an agenda of maximizing the U.S. oil and gas production, already the world’s largest.
However, analysts believe a price war between the U.S. and OPEC+ is unlikely as it may hurt both.
“A price war with the U.S. would involve OPEC+ producers maximising their output to undercut prices and drive shale production into decline,” analysts at BMI, a Fitch Group division, said in a note.
They predict Brent crude oil prices may go down below $50 as OPEC+ can deploy over 5 million barrels of oil per day in its spare capacity, prompting a fall in the U.S. shale oil production along the prices.
(Reporting by Arathy Somasekhar in Houston and Katya Golubkova in Tokyo; Editing by Sonali Paul and Kim Coghill)