(Bloomberg) -- Oil bounced between gains and losses as investors reacted to rapid-fire moves on trade by the Trump administration, with the US threatening, and then holding off, a broad package of curbs against Colombia.
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Brent edged lower toward $78 a barrel. Following a dispute over migrants, President Donald Trump first ordered tariffs against Bogota, before the White House paused the actions as Colombia agreed to all Trump’s conditions.
The salvo against Colombia was the latest in a string of globally impactful moves by the new president since he took office. Trump has also threatened action against China, Canada, Mexico and the European Union, while urging OPEC to help lower prices. He’s argued that a decline in oil could starve Russia of revenue and help put a halt to Vladimir Putin’s war in Ukraine.
Crude is still higher than it was at the start of the year thanks to a combination of cold weather and sanctions on Russian oil that spurred refiners in Asia to snap up alternative barrels. Those purchases have left key market gauges known as timespreads flashing strength, with the nearest contracts markedly higher than the ones further along.
“We could have expected that, once week one has passed, we should have seen a stronger unwind in prices, but that is not the case,” said Harry Tchilinguirian, group head of research at Onyx Capital Group. “The tightness in the underlying physical market is still holding the Brent complex higher, just look at the strength in Brent spreads.”
Meanwhile output at Iraq’s giant Rumaila oil field remains reduced by about 300,000 barrels a day after a fire last week, an official said. That was partly offset by rising output in Kazakhstan, where production hit a record of more than 2 million barrels a day on Sunday, according to a spokewoman for the country’s energy ministry.
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