NEW YORK: Oil prices fell to negative territory after rising by a dollar in post-settlement trade on Wednesday (Apr 2) as US President Donald Trump announced reciprocal tariffs on trading partners, stoking concerns that a global trade war may dampen demand for crude.
Brent futures settled 46 cents higher, or 0.6 percent, at US$74.95 a barrel, while US West Texas Intermediate crude futures gained 51 cents, or 0.7 percent, to settle at US$71.71.
US futures rose by a dollar and then turned negative over the course of Trump’s press conference on Wednesday afternoon in which he announced tariffs on trading partners including the European Union, China and South Korea.
For weeks Trump has touted Apr 2 as “Liberation Day,” bringing new duties that could rattle the global trade system.
A chart listing countries and tariffs that Trump showed during his announcement did not detail tariffs on Canada and Mexico. Canada exports some 4 million barrels per day of its crude oil to the United States.
Trump’s tariff policies could stoke inflation, slow economic growth and escalate trade disputes, possibilities that have limited oil price gains.
“Crude prices have paused last month’s rally, with Brent finding some resistance above US$75, with the focus for now turning from a sanctions-led reduction in supply to Trump’s tariff announcement and its potential negative impact on growth and demand,” said Ole Hansen, head of commodity strategy at Saxo Bank.
Comments from Mexico eased some worries about a trade war between the two countries after Mexican President Claudia Sheinbaum said on Wednesday that Mexico does not plan to impose tit-for-tat tariffs on the United States.
