Brent crude for March delivery fell 1.2% to settle at $76.58 a barrel
West Texas Intermediate crude fell 1.6% to settle below $73 a barrel
Source:
Bloomberg
Oil prices fell after President Donald Trump’s nominee for commerce secretary, Howard Lutnick, suggested that tariffs on Canada and Mexico were not a fait accompli.
Brent crude for March delivery fell 1.2% to settle at $76.58 a barrel, while West Texas Intermediate crude fell 1.6% to settle below $73 a barrel.
The declines came after Lutnick said the United States’ two largest trading partners could avoid new tariffs if they acted on illegal immigration and fentanyl flows.
Expectations that the tariffs would take effect this week had earlier spurred a rally in oil futures, briefly pushing the discount on Canadian crude to the widest range in six months before narrowing after Lutnick’s comments.
Focus on tariffs
“Crude prices continue to dance to Trump’s tariff orchestra, with the focus on the tariffs on Canada set to come into effect on Saturday,” said Ole Hansen, head of commodity strategy at Saxo Bank.
Wednesday’s price drop represents “bad sentiment across a broadly rangebound market,” he added.
Crude oil started 2025 on a high note, with US sanctions on Russian crude lifting prices, but trade war fears and weak economic data from China have largely erased the year’s gains.
Trump’s policy is likely to further weigh on markets, as the US president has asked OPEC+ to help bring down crude prices. The alliance is set to discuss Trump’s plans to boost US oil production at its next meeting on February 3, TASS reported, citing Kazakh Energy Minister Almasad Satkaliev. Traders also digested a more hawkish-than-expected decision by the Federal Reserve to keep interest rates unchanged, dampening oil demand expectations.