By Christopher Tahir – Senior Market Strategist at Exness
Oil traded down today, extending the correction after last week’s rebound, as the geopolitical risk premium continued to unwind. Easing near-term supply fears from Iran helped drive prices down, after reports that US actions in the region have been put on hold, lowering the perceived risk of an immediate disruption.
While military tensions eased, economic tensions rose and pushed the market’s focus toward demand. President Donald Trump threatened to impose a 10% tariff on imports from eight European countries starting February 1, reviving trade-war risks. Additional tariffs could weigh on global growth expectations and reduce confidence in the demand outlook for crude.
Bearish inventory signals also capped any rebound potential. The latest EIA weekly report showed US commercial crude stocks up 3.4 million barrels and gasoline inventories up 9.0 million barrels. At the same time, the market could remain under pressure due to oversupply concerns.