WTI gains ground as Trump reverses Colombia tariff threats

West Texas Intermediate (WTI) gained a firm footing near $74.00 in Monday’s European session, with the benchmark crude oil rising as the market sentiment turns cheerful after US President Donald Trump reversed tariff threats on Colombia.

Trump took back tariff threats after the South American trading partner accepted the return of illegal immigrants from the US.

Investors should note that Colombia exports a significant amount of seaborne crude to the US.

Technically, this development is negative for the oil price, but it gains as the scenario indicates that Trump tariff threats are not as fearful as what market participants had anticipated earlier.

Last week, Trump also reversed the proposal of imposing tariffs on China, saying that he can reach a deal without slapping hefty tariffs. Market participants expect the US president will use tariffs to get a better negotiation against trading partners.

However, the broader outlook of the US Dollar remains uncertain as Trump reiterated that OPEC should cut oil prices, which would hurt Russia’s finances and eventually lead to a truce between Russia and Ukraine.

“One way to stop it quickly is for OPEC to stop making so much money and drop the price of oil, and that war will stop right away,” Trump said at the World Economic Forum (WEF) in Davos on Friday.

Also, China’s economic turmoil continue to weigh on oil demand’ prospects.

The National Bureau of Statistics (NBS) reported that China’s Manufacturing Purchasing Managers’ Index (NBS) declined to 49.1 in January from 50.1 in December. Economists expected the factory data to have expanded at a steady pace.

(Source: OANDA)