Oil prices were steady near three-week lows on Thursday as market participants kept a close eye on the potential impact of tariffs from United States President Donald Trump on Mexico and Canada, the U.S.' largest crude oil suppliers.
By 3:25 pm AEDT (4:25 am GMT) Brent crude futures were down $0.07 or 0.1% to US$76.51 per barrel, while West Texas Intermediate (WTI) was flat at $72.63 per barrel.
White House spokeswoman Karoline Leavitt confirmed on Tuesday that Trump intends to impose tariffs on both countries by Saturday.
Meanwhile, Howard Lutnick, Trump's nominee for Commerce Secretary, suggested on Wednesday that the tariffs could be avoided if Canada and Mexico take swift action to curb the flow of fentanyl, while also committing to slowing China's progress in artificial intelligence.
On the demand side, the Energy Information Administration reported that U.S. crude oil stockpiles rose by 3.5 million barrels last week, closely aligning with forecasts of a 3.2 million barrel increase. This was partly due to refinery disruptions caused by winter storms sweeping across the country.
The Federal Reserve held interest rates steady on Wednesday, with Chair Jerome Powell indicating that any rate cuts would only be considered once inflation shows a renewed decline or if there are rising risks in the jobs market. Lower borrowing costs typically boost economic activity and oil demand.
Investors are also eyeing the upcoming OPEC+ meeting scheduled for 3 February, where the group of leading oil producers will discuss President Trump's push to increase U.S. oil production and potentially take a unified position on the matter.
Trump has publicly urged OPEC, especially its dominant member Saudi Arabia, to lower oil prices, claiming it would help resolve the ongoing conflict in Ukraine.
OPEC+ has already planned to gradually increase oil production starting in April, unwinding previous cuts that had been delayed due to weak demand.
Meanwhile, Russia's crude oil exports from its western ports are expected to fall by 8% in February compared to January's plan, according to Reuters. This decline is attributed to increased domestic refining and the impact of recent U.S. sanctions on Russian crude exports.
