Crude dips as US signals Canada and Mexico may avoid tariffs

Oil edged lower as investors waited for clarity on US trade policy, after Donald Trump’s pick for commerce secretary said Canada and Mexico, the country’s top crude suppliers, may avoid high tariffs.

Brent slipped near $76 a barrel, declining for a second day. Howard Lutnick said the two US neighbors could avoid the curbs if they took action on illegal migration and fentanyl. Previously, officials had indicated that the penalties could kick in this weekend.

Canada exported an average of 4.1 million barrels a day this month to its southern neighbor. The price of Canadian crude has been extremely volatile, recovering from a six-month low after Lutnick’s comments Wednesday. Mexico is the second-largest supplier.

Oil has had a bumpy start to the year, initially pushing higher as cold weather aided demand, and the outgoing Biden administration rolled out a fresh package of sanctions against Russian flows. The early gains have since been unwound, with Trump promising to boost domestic crude production, while pressuring OPEC to lower prices.

Data on the European economy also painted a bleak picture, with unexpected stagnation adding a fresh cloud over consumption.

“Growth numbers from Europe were not great,” said Giovanni Staunovo, a commodity analyst at UBS Group AG. “Growth concerns are not helping crude.”

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