Oil Prices Edges Higher With Traders In Limbo Over US Trade Policies

(Bloomberg) -- Oil edged higher as investors waited for clarity on the US administration’s plans for trade policy, with Donald Trump’s pick for commerce secretary saying Canada and Mexico may be able to avoid levies.

West Texas Intermediate rose toward $73 a barrel, after a climb in US stockpiles on Wednesday helped drive futures to the lowest close this year. Brent ended near $77. Howard Lutnick said the US’s two neighbors could avoid the curbs if they took action on illegal migration and fentanyl. Previously, officials had indicated that the penalties could kick in this weekend.

The high degree of uncertainty was reflected in comments from the Bank of Canada, which reduced interest rates on Wednesday. Governor Tiff Macklem said policymakers didn’t know what the US was going to do, or what the consequences would be. Canada is a major shipper of crude to the US.

Oil has had a bumpy start to the year, initially pushing higher as cold weather aided demand, and the outgoing Biden administration rolled out a fresh package of sanctions against Russian flows. The early gains have since been largely unwound, with Trump promising to oversee an increase in domestic crude production, while also urging OPEC to help lower prices.

Prices:

• WTI for March delivery rose 0.5% to $72.97 a barrel at 7:26 a.m. in Singapore.

• Brent for March settlement closed 1.2% lower at $76.58 a barrel on Wednesday.