NEW YORK: Oil prices rose on Tuesday as investors monitored US President Donald Trump’s tariff threats against European states that oppose his push to acquire Greenland.
Prices also drew support from the temporary suspension of output at Kazakhstan’s oil fields and expectations of firmer global economic growth that could drive fuel demand. Brent futures gained 85 cents, or 1.33percent, to USD64.79 a barrel at 11:45 a.m. ET (1645 GMT), while US West Texas Intermediate crude was up 96 cents, or 1.62percent, at USD60.40. Fears of a renewed trade war escalated over the weekend after Trump said he would impose additional 10percent levies from February 1 on goods imported from EU members Denmark, Finland, France, Germany, Sweden and the Netherlands, as well as Britain and Norway, rising to 25 percent on June 1 if no deal on Greenland was reached.
European Commission President Ursula von der Leyen said on Tuesday that the bloc’s executive arm is working on a package to support Arctic security and said that the tariffs are a mistake.
Trump’s campaign to acquire Greenland has created a generalized nervousness in the market, said John Kilduff, partner with Again Capital LLC.
The tariff threats, however, will not have an immediate impact on the oil balance, said PVM analyst Tamas Varga. He said prices had gained some support from an upward revision of this year’s global economic growth estimate by the International Monetary Fund as well as stronger diesel prices. Squeezing supply, Kazakh oil producer Tengizchevroil, led by Chevron, temporarily halted production at the Tengiz and Korolev oilfields after an issue affected power distribution systems.
Tengiz oilfield, one of the world’s largest, could be halted for another seven to 10 days, cutting crude exports via the Caspian Pipeline Consortium, sources told Reuters on Tuesday.
The oil market also drew support from better-than-expected fourth-quarter Chinese gross domestic product data released on Monday, said IG market analyst Tony Sycamore.
“This resilience in the world’s top oil importer provided a lift to demand sentiment,” he said. China’s economy grew by 5.0percent last year and the country’s refinery throughput in 2025 also climbed, edging up 4.1 percent on a year-over-year basis, data showed on Monday. China’s crude oil output also grew 1.5percent.
A sliding dollar also is supporting prices, as a weaker US currency could boost oil demand by making dollar-denominated purchases cheaper. “A weaker US dollar provided some support to oil and the broader commodities complex,” ING commodities strategists said on Tuesday.
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