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Crude Oil Price Under Pressure Due to Trade Tensions


March 5, 2025 (Investorideas.com Newswire) Investorideas.com, rated as a top 100 investment website for investing ideas, issues market commentary from Quasar Elizundia, Expert Research Strategist at Pepperstone.


Crude Oil Price Under Pressure Due to Trade Tensions

“Oil prices are facing a challenging scenario, largely impacted by trade tensions between the United States and its key partners-particularly China, Canada, and Mexico-which have pushed crude futures to their lowest level in three years. The uncertainty caused by the imposition of tariffs and corresponding retaliatory measures is eroding global confidence, potentially slowing down global economic activity and, in turn, weakening oil demand. This combination of factors has increased volatility in energy markets.

Another key bearish factor is the expectation that the OPEC+ alliance will decide to increase supply in the coming months. The perception of additional supply is exerting further downward pressure on prices. In this regard, the recent report from the U.S. Energy Information Administration (EIA) reinforces the view of a well-supplied market: U.S. crude oil inventories increased by 3.6 million barrels, reaching 433.8 million. Although these reserves are 4% below the five-year average, the weekly increase highlights the supply dynamics.

U.S. refinery activity contracted by 346,000 barrels per day, reducing the utilization rate to 85.9%. However, gasoline production rose to 9.6 million barrels per day, reflecting relatively strong domestic demand, while distillate production fell to 4.6 million barrels per day. Additionally, it is worth noting that crude imports decreased by 106,000 barrels per day, a trend that, if sustained, could significantly impact exporters. In particular, countries such as Mexico, Colombia, and Canada whose fiscal stability largely depends on oil sales to the United States, could face additional pressure on their public finances, intensifying their economic vulnerability.

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