Singapore February 4 2025: Oil prices retreated on Tuesday as U.S. President Donald Trump paused for a month a decision on steep tariffs on Mexico and Canada, the United States’ biggest foreign oil suppliers, while prospects of higher OPEC+ supplies from April also weighed.
Brent futures fell 50 cents, or 0.7%, to $75.46 a barrel by 0432 GMT, while U.S. West Texas Intermediate (WTI) crude declined 89 cents, or 1.2%, to trade at $72.27.
Both Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum said they had agreed to bolster border enforcement efforts in response to Trump’s demand to crack down on immigration and drug smuggling.
That would pause for 30 days tariffs of 25%, with a 10% tariff on energy imports from Canada, that had been set to take effect on Tuesday.
“The dominant theme for global markets has been all about US tariffs,” IG market strategist Yeap Jun Rong said in an email.
While the tariff delay for Mexico and Canada has given room for risk sentiment to improve and contributed to an unwinding in the U.S. dollar, oil prices have struggled to regain the upside, Yeap added.
“The prospect of higher oil supplies (OPEC+) returning to markets from April could be a key overhang for prices … especially with oil prices still at Oct. 2024 levels.”
The Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, discussed on Monday a call by Trump to raise production, but agreed to stick to its policy of gradually raising oil output from April.
