Oil prices on track for largest monthly loss since September on Trump's tariffs
Global oil prices fell in European trade on Friday, resuming losses and about to hit 11-week lows, and on track for the heftiest monthly loss since September 2024 amid mounting concerns about Trump’s tariffs and their impact on the global economy.
Prices are also pressured as Iraq prepares to resume crude exports from Kurdistan, which overshadowed a surprise drop in US crude stocks last week.
Prices
US crude fell 1.1% today to $69.2 a barrel, with a session-high at $70.145.
Brent fell 0.9% to $72.61 a barrel, with a session-high at $73.41.
On Thursday, US crude rose 1.9%, while Brent added 1.5%, marking the first profit in three days away from 11-week lows.
Oil prices also rose back then after fresh US sanctions on the Venezuelan oil industry, while US crude stocks fell unexpectedly.
Monthly Trades
Global oil prices are down 5.5% on average in February, on track for the first monthly loss in three months, and the heftiest since September.
Trump’s Tariffs
As Trump prepares to impose tariffs on Mexico and Canada, while threatening the EU and other countries with additional tariffs, inflationary concerns are mounting on the Federal Reserve, with interest rates likely remaining at current levels for an extended duration.
Trump’s tariffs could impact global growth according to economic analysts, which would weaken demand on oil.
Iraqi Supplies
Baghdad will soon announce a resumption of crude exports from the semi-autonomous Kurdistan region through the Turkish pipeline according to an official statement.
Iraq will export 185 thousand bpd through the line, with the amount increasing gradually.
Also Reuters reports that OPEC+ is considering an oil production hike in April as it continues to assess the status of global supplies with ongoing US sanctions on Venezuela, Iran, and Russia.
US Stocks
The Energy Information Administration reported a drawdown of 2.3 million barrels in US crude stocks to 430.2 million barrels, while analysts expected a build of 1.7 million barrels.
Gasoline stocks rose 0.4 million barrels to 248.3 million barrels, while distillate stocks rose 3.9 million barrels to 120.5 million barrels.
After plunging below $80,000: Bitcoin on track for heftiest monthly loss since 2022
Bitcoin tumbled over 7.5% on Friday and resumed the losses while piercing the important barrier of $80,000 and plumbing three-month lows, on track for the heftiest monthly loss since 2022 on risk aversion.
The crypto market is still tense amid a lack of positive stimuli, while US stocks continue to tumble on Wall Street, led by the tech sector.
Prices
Bitcoin tumbled over 7.5% at Bitstamp today to $78,018, the lowest since November 10, with a session-high at $84,798.
On Thursday, bitcoin rose 0.7%, the first profit in five days on quick short-covering.
Crypto Market Value
The market value of cryptocurrencies fell by $175 billion on Friday to a total of $2726 trillion, the lowest since November.
Monthly Trades
Bitcoin is down over 11% in February so far, on track for the largest monthly loss since June 2022.
Positive Stimulus
Bitcoin started the year with strong momentum, underpinned by US President Trump’s positive stance on the crypto industry, with traders expecting a more supportive and clear regulatory framework for the crypto market.
But the steam has gone out of the market since Trump’s executive crypto order in January, as it was more conservative than expected, especially when it comes to forming a strategic bitcoin reserve.
And with the lack of fresh new stimuli, the market is now waiting for more signals on the future of regulations and institutional demand directions, making prices more volatile in recent weeks.
Wall Street
US stock indices extended their heavy losses on Thursday amid mounting monetary policy uncertainty and global trade tensions.
S&P 500 fell 1.6% to six-week lows, while NASDAQ slumped 2.75% to three-month lows, led by the tech sector.
US dollar expands gains to two-week high before US spending data
The US dollar rose in European trade on Friday against a basket of major rivals, expanding gains for the third straight session and hitting a two-week high, and on track for the first weekly profit in a month on strong investment demand with mounting concerns about Trump’s tariffs.
Recent bullish remarks by some Fed officials hurt the odds of a Fed rate cut in the first half of the year, with investors now waiting for crucial US personal spending data later today for January.
The Index
The dollar index rose 0.2% to 107.45, the highest since February 13, with a session-low at 107.18.
On Thursday, the index rose 0.8%, moving away from two-month lows at 106.13.
Weekly Trades
The dollar index is up 0.8% so far this week on track for the first weekly profit in a month.
Trump’s Tariffs
As Trump prepares to impose tariffs on Mexico and Canada, while threatening the EU and other countries with additional tariffs, inflationary concerns are mounting on the Federal Reserve, with interest rates likely remaining at current levels for an extended duration.
Cleveland Fed President Beth Hammock said she expects Fed’s monetary policies to remain steady for the time being.
Philadelphia Fed President Patrick Harker also supports maintaining borrowing costs steady at current levels.
According to the Fedwatch tool, the odds of a 0.25% Fed interest rate cut in March stood at 4.5%.
Now investors await important US personal consumption data later today to gauge the state of inflation in the world’s largest economy.
Gold plumbs three-week trough as US dollar advances
Gold prices skidded in European trade on Friday, hitting a three-week trough and about to mark its first weekly loss this year as the US dollar advances against major rivals.
It comes before US personal consumption data for January, upon which the Federal Reserve relies to estimate inflation levels in the country.
Prices
Gold prices fell 0.9% to $2851 an ounce, the lowest since February 6, with a session-high at $2885.
On Thursday, gold lost 1.35%, the second loss in three days on profit-taking away from a record high at $2956.
Weekly Trades
Gold is down 2.9% this week on track for the first weekly loss in 2025.
Gold marked its eighth weekly profit in a row last week, the longest such streak of gains since June 2020.
US Dollar
The dollar index rose 0.2% on Friday, expanding gains for the third straight session, and hitting a two-week high at 107.45 against a basket of major rivals.
A stronger dollar makes greenback-denominated gold futures costlier to holders of other currencies.
It comes as US President Donald Trump announced plans to enforce 25% tariffs on Canada and Mexico next week and not April as he previously suggested. He also plans additional 10% tariffs on Chinese imports, and pledged to impose 25% tariffs on EU cars and products.
US Rates
Cleveland Fed President Beth Hammock said she expects Fed’s monetary policies to remain steady for the time being.
Philadelphia Fed President Patrick Harker also supports maintaining borrowing costs steady at current levels.
According to the Fedwatch tool, the odds of a 0.25% Fed interest rate cut in March stood at 4.5%.
Now investors await important US personal consumption data later today to gauge the state of inflation in the world’s largest economy.
SPDR
Gold holdings at the SPDR Gold Trust fell 0.86 tons yesterday to a total of 906.1 tons, away from August 2023 highs at 907.82 tons.