Oil steady as markets await clarity on tariffs by Trump on Canada, Mexico

Oil prices were little changed in early trading on Thursday, as markets watched for tariffs by U.S. President Donald Trump on Mexico and Canada, the two largest suppliers of crude oil to United States.

Brent crude futures rose 7 cents, or 0.1%, at $76.71 a barrel by 0122 GMT. U.S. crude futures climbed 17 cents, or 0.2%, to $72.79. U.S. crude futures had settled at their lowest price this year on Wednesday.

U.S. President Donald Trump still plans to make good on his promise to issue tariffs on Canada and Mexico on Saturday, White House spokeswoman Karoline Leavitt told reporters on Tuesday.

Trump's nominee to run the Commerce Department, Howard Lutnick, said on Wednesday that Canada and Mexico can avoid the tariffs if they act swiftly to close their borders to fentanyl, while vowing to slow China's advancement in artificial intelligence.

On the demand front, crude oil stockpiles in the U.S. rose by 3.46 million barrels last week, roughly in line with analysts' estimate for a rise of 3.19 million barrels, as winter storms that swept the country last week hit refinery utilization.

The U.S. central bank held interest rates steady on Wednesday, and Federal Reserve Chair Jerome Powell said there would be no rush to cut them again until data showed a renewed decline in inflation or rising risks in the jobs market. Lower borrowing costs boost economic activity and oil demand.

Investors also looked ahead to a ministerial meeting by the Organization of the Petroleum Exporting Countries and its allies, together called OPEC+, scheduled for Feb. 3.

The OPEC+ group of leading oil producers is set to discuss Trump's efforts to raise U.S. oil production and take a joint stance on the matter, Kazakhstan said on Wednesday.

Trump has also publicly called on OPEC and its leading member, Saudi Arabia, to lower oil prices, saying doing so would end the conflict in Ukraine.

The group already has a plan in place to start raising oil output from April, gradually unwinding previous cuts. That plan had been delayed several times because of weak demand.

Follow Emirates 24|7 on Google News.