Oil futures fell below $72 after China imposed tariffs on US coal, LNG, and crude oil, escalating trade tensions. The 15% duty on coal and LNG, along with a 10% tariff on crude and farm equipment, takes effect on February 10. This came after Trump’s 10% tariff on all Chinese goods, raising fears of a full-blown trade war. Meanwhile, OPEC and its allies upheld their current production strategy, ignoring Trump’s calls to increase supply in its meeting yesterday. At the previous ministerial gathering in December, the alliance decided to delay the start of the easing of the 2.2 million bpd cuts to April 2025, from January 2025. The group also extended the period in which it would unwind all these cuts into the following year, until September 2026. OPEC+ reiterated the importance of compliance with the cuts and the timely compensation for those producers who haven’t adhered to their assigned quotas. The US delayed tariffs on Canada and Mexico for a month after securing border enforcement commitments. With no resolution in sight, oil markets remain on edge. MCX February crude oil futures slipped below Rs 6300, trading down Rs 55 per barrel.
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