Brent gains as market focuses on US tariff pause

The front-month ICE Brent contract has moved $1.81/bbl higher on the day from Friday, to trade at $65.24/bbl at 09.00 GMT.

IMAGE: Oil barrels. Getty Images

Upward pressure:

Brent’s price moved higher over the weekend after the US administration implemented a temporary pause on country-specific tariffs for most trade partners for 90 days.

This development has eased some demand concerns, with global markets continuing to focus on further trade talks between Washington and its allies. “A relief rally was triggered after Trump backtracked and announced a 90-day pause on these levies,” ANZ Bank’s senior commodity strategist Daniel Hynes remarked.

Besides, the Donald Trump-led US government on Friday granted exclusions from steep tariffs on smartphones, computers and other electronic devices imported largely from China, Reuters reports.

“The sudden shifts in US trade policy left the market in two minds, with prices swinging wildly,” Hynes added.

Downward pressure:

Representatives from the US and Iran held "positive" and "constructive" talks in Oman on Saturday, according to media reports. This news has capped some of Brent’s price gains.

Both parties have agreed to resume talks this week in an effort to address concerns over Tehran’s advancing nuclear program, as President Trump warned earlier of potential military action should negotiations fail to yield a deal, according to Reuters.

A positive outcome could see Washington lifting its strict sanctions on Tehran’s oil exports, according to market analysts.

“Further talks are planned. This may help remove some of the sanction risk affecting the oil market, particularly if talks keep on moving in the right direction,” ING Bank’s analysts added.

By Aparupa Mazumder

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