Crude oil futures took a downward turn on Tuesday morning following the decision by the US to postpone the imposition of tariffs on Canada and Mexico by a month. At 9:56 am, April Brent oil futures were at $75.51, down 0.59%, while March WTI crude oil futures were at $72.31, down 1.16%. On the Multi Commodity Exchange (MCX), February crude oil futures were trading at ₹6307, a decrease of 0.43%, and March futures were at ₹6281, down by 0.30%.
The decision to delay tariffs on Canada and Mexico came after the leaders of both countries agreed to enhance border enforcement in response to concerns raised by US President Donald Trump over immigration and drug smuggling. Trump had recently imposed tariffs on imports from these countries and China. He also expressed intentions to discuss tariffs with China in the near future.
In a recent report, Warren Patterson, Head of Commodities Strategy at ING Think, and Ewa Manthey, Commodities Strategist, suggested that Canada should consider investing in additional pipeline capacity to mitigate risks associated with trade tensions. They recommended building infrastructure that would allow Canadian producers to have more flexibility and access to different markets. This move would require several years for implementation but could prove beneficial in the long run.
Despite Trump’s request for OPEC+ to increase oil production to lower prices, the group decided to keep its output policy unchanged during a recent meeting. The Joint Ministerial Monitoring Committee (JMMC) recommended maintaining the current output policy, indicating that the planned supply increase will proceed as scheduled starting in April. Preliminary data showed a decline in OPEC production in January, with Iraq leading the reductions due to an incident at the Rumaila oilfield.
On the commodity trading front, February zinc futures were up on MCX, while March jeera and April kapas futures saw gains on the National Commodities and Derivatives Exchange (NCDEX). Overall, market conditions remain uncertain, with the next JMMC meeting scheduled for April 5.
