HG MARKETS:

Oil prices fell on Monday as investor sentiment weakened due to concerns over the impact of U.S. import tariffs on global economic growth and fuel demand, coupled with rising output from OPEC+ producers. Brent crude edged down by 6 cents to $70.30 per barrel, following a 90-cent gain on Friday. Meanwhile, U.S. West Texas Intermediate (WTI) declined by 8 cents to $66.96 per barrel, after settling 68 cents higher in the previous trading session.

WTI recorded its seventh consecutive weekly decline, marking its longest losing streak since November 2023, while Brent crude fell for a third straight week. The downward trend followed U.S. President Donald Trump’s imposition and subsequent delay of tariffs on key oil suppliers Canada and Mexico, as well as the escalation of trade tensions with China, which retaliated with tariffs on agricultural imports from the U.S. and Canada.Tariff uncertainty is a key driver behind the weakness, Saudi Arabia’s oil price reductions and deflationary pressures in China have also dampened market sentiment.

Additional factors contributing to the decline in oil prices include concerns over U.S. economic growth, speculation regarding the potential easing of U.S. sanctions on Russia, and the decision by OPEC+ to increase oil production starting in April. However, analysts anticipate that technical support at $65–$62 per barrel may hold firm, potentially paving the way for a rebound towards $72 per barrel.

Oil prices recouped some losses on Friday following President Trump’s statement that the U.S. would impose further sanctions on Russia should it fail to negotiate a ceasefire with Ukraine. Meanwhile, OPEC+ reaffirmed its plan to increase production, though Russian Deputy Prime Minister Alexander Novak indicated that the group could reconsider its stance if market conditions necessitate an adjustment.

Adding to supply concerns, Saudi Arabia announced price cuts for crude grades sold to Asia for the first time in three months, effective April. In a separate geopolitical development, Trump signaled interest in negotiating a deal with OPEC member Iran to prevent the country from pursuing nuclear weapons a claim that Iran has repeatedly denied.

As part of the U.S. administration’s “maximum pressure” strategy against Iran, Washington on Saturday revoked a waiver that had permitted Iraq to make payments to Iran for electricity, according to a State Department spokesperson. Looking ahead, market participants will closely monitor upcoming monthly reports from the International Energy Agency (IEA) and OPEC for updated demand and supply forecasts.