"Trump's Tariff Orchestra" Causes More Losses For Oil

Negative sentiment was compounded by another U.S. stockpile rise:File Image/Pixabay

Tariffs, rising stockpiles, and overall pessimism regarding demand contributed to yet another round of losses for oil on Wednesday, capped by the assertion that the commodity will continue to face pressures throughout 2025.

Brent settled down 91 cents at $76.58 per barrel, while West Texas Intermediate settled down $1.15 to $72.62 per barrel.

The most immediate impact among the basket of negative developments on oil traders was the Energy Information Administration disclosing that U.S. crude stockpiles rose by 3.46 million barrels last week, as refiner intake slumped for a third consecutive week; this was slightly above projections for a 3.19 million barrel increase.

This was matched by the White House reaffirming that U.S. president Donald Trump still plans to impose 25 percent tariffs on imports from Canada and Mexico starting next month.

Ole Hansen, head of commodities strategy at Saxo Bank, said "Crude prices keep dancing to the rhythm of Trump's tariff orchestra, with Canada tariffs in focus as they go into effect on Saturday," and he added that Wedensday's crude trading activity represents "a sour sentiment across an overall rangebound market."

Trailing all other concerns was Libya, whose National Oil Corp disclosed that export activity was running normally after company officials talked with protesters who had demanded a halt to loadings at a major oil port; this apparently eased supply concerns for a small faction of observers within an analytical community overwhelmingly worried about demand.

For his part, Andrew Lipow, president of Lipow Oil Associates, told Bloomberg that oil prices will likely remain under pressure throughout 2025: "I think the oil market is beset by a poor demand growth prospect," and he cited increasing supply in many parts of the world as cause for concern.

In other oil news on Wednesday that may affect trading patterns in the immediate future, the General Staff of the Armed Forces of Ukraine reported that Lukoil's Norsi refinery in Kstovo, western Russia, was hit with drones - a second hit at a Russian oil refinery in less than a week.

The attack ignited a 20,000-ton oil storage tank ablaze and damaged vital infrastructure, including a hydrotreater and railway loading rack.