EBC Markets Briefing | Oil drops as headwinds pile up

Oil prices eased on Friday, heading for their first monthly drop since November, as uncertainty over global economic growth and fuel demand from Washington's tariff threats.

Trump on Thursday said his proposed an extra 10% duty on Chinese imports, on top of the 10% announced earlier this month. Zelenskiy is going to visit Washington on Friday to sign an agreement on rare earth minerals.

Hedge funds were trimming net-bullish bets in a further sign of market softening last week. But the prices jumped on Thursday after Trump revoked a licence granted to Chevronto operate in Venezuela.

The cancellation of the licence could lead to the negotiation of a fresh agreement between the US producer and state company PDVSA to export crude to other destinations, sources close to the talks said.

Trump also wanted the Keystone XL Pipeline built and pledged easy regulatory approvals for the crude oil project. Its permit was revoked by the Biden administration on the grounds of environmental protection.

Crude inventories fell by 2.3 million barrels in the week ended 21 February, the EIA said, compared with analysts' expectations for a 2.6 million-barrel rise. Meanwhile, gasoline stocks rose to the highest since June 2021.

WTI crude broke out of its trading range on the downside and seemed suppressed by $70. We see it weaken towards $68 if staying below that level.

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