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Oil prices steady as investors assess impact of Trump tariffs

The oil price was little changed Tuesday as the markets assessed the impact of the newly announced U.S. Tariffs on countries who buy Venezuelan Oil and the uncertain outlook for the global demand.

Brent crude futures rose 1 cent to $73.01 per barrel at 0424 GMT. U.S. West Texas Intermediate Crude fell 1 cent to $69.10.

Both benchmarks rose more than 1% after U.S. president Donald Trump announced that a 25% tax would be levied on countries importing gas and oil from Venezuela. Venezuela's primary export is oil, and China is the largest buyer.

Investors are concerned that Trump's tariffs will slow down the economy and reduce oil demand. However, the prospect of tighter U.S. restrictions on Venezuelan oil and Iranian oil, as well as his rapid policy changes, makes it difficult to make large investments, said Tsuyoshi Ueno. Senior economist at NLI Research Institute.

He added: "We expect WTI will stay around $70 throughout the rest of the calendar year with seasonal gains possible as the U.S. enters the driving season."

The U.S. imposed new sanctions last week to target Iranian oil exports.

Crude oil prices fell from their session highs on Tuesday after the Trump Administration extended to Monday a deadline of May 27 for U.S. producers Chevron to end operations in Venezuela.

ANZ analysts said in a report that the withdrawal of Chevron’s operating licence could result in a reduction in production by around 200,000 barrels / day.

The rising global trade tensions and economic worries have also pushed up oil prices.

Trump said that automobile tariffs will be coming soon, even though he suggested that not all his threatened levies will be imposed by April 2, and that some countries may receive breaks. Wall Street interpreted this as a sign that he was flexible on a subject that has been causing turmoil in the markets for several weeks.

Four sources said that OPEC+ (the Organization of the Petroleum Exporting Countries) and its allies, including Russia, would likely stick with their plan to increase oil production for a second month consecutive in May. This is despite the steady price of oil and plans to make some members reduce pumping as compensation for past overproduction.

Investors are also watching the talks to end Ukraine's war, which could lead to an increase in supply of Russian crude oil to global markets.

U.S. officials and Russians concluded a day-long discussion on Monday, focusing on a proposal for a limited ceasefire between Kyiv (Ukraine) and Moscow (Russia). The talks were part of an effort by Washington to pave the path for wider peace negotiations. Reporting by Yuka Obaashi in Tokyo, Siyi Liu and Kim Coghill in Singapore. Editing by Muralikumar Anantharaman & Kim Coghill.

(source: Reuters)