(Investing) – Oil prices slipped lower Monday in volatile trading, as traders digested President Donald Trump demands that the OPEC lower crude prices as well as his brief imposition of tariffs on Colombia.
At 08:55 ET (13:55 GMT), Brent oil futures expiring in March fell 0.4% to $77.23 a barrel, while West Texas Intermediate crude futures fell 0.4% to $74.40 a barrel.
Prices were nursing steep losses from last week after Trump declared a national emergency and called for a sharp increase in US energy production, while also calling on the Organization of Petroleum Exporting Countries to bring down crude prices.
Trump briefly imposes tariffs on Colombia
Trump briefly imposed 25% import duties on all Colombian goods after Bogota did not allow two US military planes carrying migrants to land in the country.
Although this move was quickly reversed after Colombian authorities relented to the US demands, but it ramped up concerns that Trump could make good on his threat to impose trade tariffs against other major economies, including Canada, Mexico, and China.
The US is Colombia’s biggest export destination, especially for its oil, although its crude exports make up only a fraction of overall U.S. oil consumption.
Putting further pressure on oil are signs that maybe the latest US sanctions are not having a significant impact on Russian oil exports.
“Tanker rates appear to be coming off from their recent highs following the announcement of sanctions against Russia, suggesting that Russian oil is still flowing through the use of Russia’s shadow tanker fleet, despite a large share of this fleet being sanctioned,” said analysts at ING, in a note.
Trump calls for additional OPEC production
The US President also reiterated his call for OPEC to lower oil prices, claiming that lower oil prices would hurt Russia’s revenue streams and stop the Russia-Ukraine war.
The OPEC has plans in place to begin slightly increasing production from April, as it begins scaling back output cuts imposed over the past two years. These curbs provided only fleeting support to prices.
The outgoing Biden administration had also imposed stricter sanctions on Russia’s oil industry, although this was expected to have limited impact on Russia’s oil revenues, given the country’s strong buyer pool in Asia.
Weak China PMI weighs on crude
Oil markets were also dented by weak PMI data from China, which showed manufacturing activity unexpectedly shrank in January, while non-manufacturing activity growth slowed sharply.
The readings showed local businesses only took limited support from recent stimulus measures from Beijing, and that China will likely have to do more to shore up growth.
The readings also came just days after Trump threatened to impose 10% tariffs on China, which could further pressure its economy and dent its appetite for crude.
China is the world’s biggest oil importer, but has been a major point of contention for crude markets amid steadily cooling economic growth over the past three years.
(Ambar Warrick contributed to this article.)
