Oil prices remained largely unchanged on Monday as the markets exercised caution ahead of potential new tariff announcements by U.S. President Donald Trump, while also weighing the possibility of a peace agreement between Russia and Ukraine. As of 21:32 ET (02:32 GMT), Brent Oil Futures held steady at $74.76 a barrel, and Crude Oil WTI Futures expiring in March were similarly muted at $70.69 a barrel.
Traders cautious amid trade war fears and supply concerns
President Trump’s tariff announcements last week reignited fears of a global trade war, which could hinder economic growth and diminish demand for crude oil. Analysts have warned that escalating trade tensions between the U.S. and its trading partners, particularly China, could significantly impact global energy markets.
In another development, Trump mentioned on Sunday that he may soon meet with Russian counterpart Vladimir Putin to discuss ending the Ukraine war. He emphasized his commitment to peace and his belief that both leaders desire to halt hostilities. This sentiment contributed to a bearish outlook, as a resolution to the conflict could lead to the lifting of sanctions on Russian oil exports, potentially augmenting global supply.
Russia is among the world’s largest oil producers, and any considerable increase in its exports could counterbalance the supply cuts implemented by OPEC+ earlier this year.
Read more: Oil prices rise to $75.16, break third weekly decline as trade war fears ease
Fed comments in focus after mixed inflation data
This week, financial markets will closely monitor a series of speeches from U.S. Federal Reserve officials, starting with Federal Open Market Committee members Patrick Harker and Michelle Bowman on Monday. Their insights are particularly anticipated following last week’s mixed inflation data, which indicated a 3 percent annual increase in the Consumer Price Index (CPI) for January, slightly exceeding the previous month’s rate of 2.9 percent.
The unexpected rise in inflation has tempered expectations regarding near-term interest rate cuts. The trajectory of interest rates has significant implications for the oil market. Higher rates can bolster the U.S. dollar, making oil more expensive for holders of other currencies and potentially dampening demand. Conversely, signs of a dovish shift could weaken the dollar, offering support to oil prices.
