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Crude Oil Caught in Tariff Turmoil and Supply Storm
Lagos — Crude oil futures maintained their stability prior to the U.S. trade policy statement, with traders remaining wary, eager to see whether tariffs might impact crude demand. Low trading activity levels, influenced by uncertainties regarding potential threats to worldwide demand, have the possibility of causing volatile price movements.
A confrontational tariff strategy might slow down economic expansion and reduce crude usage, which could depress pricing. On the other hand, adopting a milder tactic may avoid a significant downturn and provide steadiness to oil costs.
The situation becomes even more complex due to the U.S. government's emphasis on additional tariffs aimed at Russian petroleum and the escalation of sanctions against Iran. There is also an increased risk posed by possible geopolitical conflicts that could interfere with supplies.
Conversely, rising U.S. crude inventories could affect sentiment. While oversupply concerns could weigh on prices, supply disruptions due to sanctions may cushion its downside risks. The market could also react to additional inventory data from the EIA later today.
At the same time, sanctions imposed on Venezuela’s oil industry have intensified worries about supplies, leading to notable decreases in exports. Such actions might further constrain worldwide supply, thereby offering some backing to crude prices.
*Lixing, Financial Market Strategy Advisor for Exness
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