Oil rallied on Friday after President Donald Trump threatened more sanctions against Russia if a peace deal with Ukraine was not reached. But futures were still down more than 3% for the week amid the expectation of a supply boost next month coupled with uncertainty over Trump’s tariff policy.
On Friday West Texas Intermediate crude futures (CL=F) settled off their session highs to close just above $67 per barrel while Brent futures (BZ=F) settled above $70 per barrel.
Futures jumped to session highs earlier on Friday after President Trump wrote on Truth Social, “Based on the fact that Russia is absolutely ‘pounding’ Ukraine on the battlefield right now, I am strongly considering large scale Banking Sanctions, Sanctions, and Tariffs on Russia until a Cease Fire and FINAL SETTLEMENT AGREEMENT ON PEACE IS REACHED.”
Meanwhile media reports citing people familiar with the matter in Moscow indicated Russia is willing to talk about a temporary truce in Ukraine if there is progress toward a final peace settlement.
Earlier this week oil fell to multi-year lows after the Organization of Petroleum Exporting Countries and its allies (OPEC+) surprised Wall Street by announcing it would bump up production in April as a first step toward unwinding its production cuts.
The threat of a full-blown trade war sparked by US tariffs on its trading partners also weighed on markets as Wall Street anticipated a slowdown in economic growth.
“Our analysis, which links global oil demand growth to the GDP, suggests that a 100 basis point slowdown in GDP growth in both the US and China could collectively reduce global oil demand growth by 250,000 barrels per day,” Natasha Kaneva, head of the global commodities strategy research team at JPMorgan, wrote in a note.
On Thursday the White House granted a tariff exemption until April 2 on some goods and services from Canada and Mexico.
The move follows a one-month tariff delay for Ford (F), GM (GM), and Stellantis (STLA) announced on Wednesday. The developments came after the Trump administration implemented 25% tariffs against Canada and Mexico on Tuesday.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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