Tariff Doubts Send Oil Prices Lower Ahead of Fed Meeting
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Oil fell below $73 a barrel after President Donald Trump’s pick for commerce secretary suggested tariffs on Canada and Mexico are not a done deal.
In his Senate confirmation hearing Jan. 29, Howard Lutnick said the U.S.’s two biggest trading partners can avoid new levies if they take action on illegal migration and fentanyl flows. Expectations that the tariffs will go into effect this weekend had earlier spurred a rally in oil futures and pushed the discount for Canadian crude to the lowest in six months.
“Crude prices keep dancing to the rhythm of Trump’s tariff orchestra, with Canada tariffs in focus as they go into effect on [Feb. 1],” said Ole Hansen, head of commodities strategy at Saxo Bank. The price decline Jan. 29 represents “a sour sentiment across an overall rangebound market,” he added.
Crude started 2025 higher as U.S. sanctions against Russia lifted prices, but trade-war concerns and poor economic data from China have largely erased the year’s gains.
(Bloomberg)
The rollout of Trump’s policy agenda has the potential to roil markets further, with the US president calling on OPEC+ to help lower crude prices. The producer cartel is set to discuss Trump’s plans to increase U.S. oil production at its next meeting on Feb. 3, Tass reported, citing Kazakhstan’s Energy Minister Almassadam Satkaliyev.
Traders will be tuned into a Federal Reserve meeting later Jan. 29 to parse signals from Chair Jerome Powell on which way inflation is going.
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