Oil Holds Losses as Signs of Tariff Relief Spark Uncertainty

(Bloomberg) — Oil held losses after Commerce Secretary Howard Lutnick said the Trump administration could walk back some tariffs on Mexico and Canada, injecting more uncertainty into global markets.

West Texas Intermediate traded near $68 a barrel after falling 3% over the past three sessions, while Brent was around $71. Lutnick didn’t explicitly say what actions President Donald Trump was considering, but discounted the notion the levies would be fully rolled back. He made the remarks on Fox.

Crude has trended lower since mid-January as Trump’s trade policies raise the prospect of trade wars on multiple fronts, which could hit energy demand. Oil options traders are the most bearish in five months due to concerns about the fallout from US tariffs and OPEC plans to revive halted production.

“Canada is bunkering down for a fight,” said Wayne Gordon, the regional chief investment officer at UBS Group AG in Singapore. “The real risk is this thing gets drawn out,” he added, referring to tensions over tariffs.

Trump’s levies could result in a redrawing of global crude flows, depending on their final makeup. Mexican oil may be directed to regions such as Asia, tariff-free Latin American grades could head to the US in greater quantities, and US East Coast fuel buyers will need to turn to Europe.

Elsewhere, China set its economic growth goal at about 5% for 2025, raising expectations for officials to unleash more stimulus as they confront a US trade war. Premier Li Qiang announced the target as he delivered the government’s annual work report to the national parliament in Beijing.

To get Bloomberg’s Energy Daily newsletter in your inbox, click here

More stories like this are available on bloomberg.com