(Bloomberg) -- Oil steadied after a decline as concerns that a trade war between the US and China will hurt global growth were offset by President Donald Trump ramping up economic pressure on Iran.
West Texas Intermediate traded below $73 a barrel after a rocky start to the week that saw markets whipsawed by announcements of tariffs and then delays to levies on Mexico and Canada. Brent crude closed above $76. Meanwhile, Trump signed a directive on Tuesday asking Treasury Secretary Scott Bessent to use sanctions and tougher enforcement of existing measures to increase the pressure on Tehran.
Beijing on Tuesday issued a swift but restrained retaliation to Trump's levies. A trade war between the world's two biggest economies is unlikely to rattle US exports of crude, as flows to China had already dipped to less than 5% of total American shipments. China markets reopen later Wednesday after Lunar New Year holidays.
“Near term implications to commodity markets will be limited,” Goldman Sachs Group Inc. analysts including Samantha Dart said in a note. “Impacted US volumes are likely to easily find alternative buying markets, while China replaces impacted import volumes with alternative suppliers.”
Crude is at risk of losing all of its year-to-date gains, as concerns over global growth from Trump's tariff threats erase earlier gains from cold winter weather and US sanctions on Russia. While Trump has held off from levies on Canada, at least one US refiner said it stood ready to switch to domestic oil should the increased duties come into force.
Elsewhere, the industry-funded American Petroleum Institute reported US nationwide commercial crude inventories rose by 5 million barrels last week, according to a document seen by Bloomberg. That would be the second straight advance from the lowest level since March 2022, if confirmed by official data later on Wednesday.
Prices:
WTI for March delivery slipped 0.2% to $72.57 a barrel at 8:08 a.m. in Singapore.
Brent for April settlement closed 0.3% higher at $76.20 a barrel.
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