Brent gains after US eases some tariff restrictions

The front-month ICE Brent contract has gained $0.95/bbl on the day, to trade at $70.23/bbl at 09.00 GMT.

PHOTO: Oil barrels. Getty Images

Upward pressure:

The US government on Thursday exempted goods covered by its six-year-old trade policy with Canada and Mexico, from the 25% imposed tariffs for a one-month period, Reuters reports.

The US, Canada and Mexico are partners in a North American trade agreement known as USMCA. This news has eased some market concerns amid the looming threat of a trade war, thereby supporting oil prices today.

Brent crude’s price found support “as the market weighed up the impact of Trump’s move to delay tariffs on imports from Mexico,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Downward pressure:

Brent’s price gains were modestly capped by a rise in US crude stocks.

Commercial US crude oil inventories increased by 3.6 million bbls to touch 433.8 million bbls for the week ending 28 February, according to data from the US Energy Information Administration (EIA).

The build reported by the EIA was “slightly higher-than-expected,” VANDA Insights’ founder and analyst Vandana Hari said.

An increase in US crude stocks is seen as a negative indicator of oil demand growth and can put downward pressure on oil prices.

By Aparupa Mazumder

Please get in touch with comments or additional info to news@engine.online