SINGAPORE/WASHINGTON (Reuters): US President Donald Trump said on Friday his administration will impose tariffs related to oil and gas by Feb. 18.
As reports came in on Trump's plans, oil prices eased on Friday and closed the week lower as investors awaited 25% tariffs by the United States on Canada and Mexico, expected on Saturday.
Brent crude futures for March, which expire on Friday, settled down 11 cents at US$76.76 a barrel. The more actively traded second month futures were down 31 cents, at $75.58.
US West Texas Intermediate crude closed down 20 cents, or 0.3%, at US$72.53.
For the week, the Brent and WTI benchmarks lost 2.1% and 2.9%, respectively, and marked the second straight week of losses.
Trump will include a process for Canada and Mexico to seek specific exemptions for certain imports, sources had told Reuters, adding that new tariffs would become effective on March 1.
But the White House said Saturday's deadline holds and that there was no update on exemptions for certain imports.
Crude futures continue to drift as traders await the outcome of Trump's tariff threats, said Dennis Kissler, senior vice president of trading at BOK Financial.
Canadian crude is used by many U.S. Midwest refineries and a curtailed flow will likely support fuel prices, he added.
Canada and Mexico are the two largest crude oil exporters to the United States, but it is unclear if oil would be included among the tariffs. Trump said on Thursday he would soon decide whether to exclude oil imports from the tariffs.
Tariffs would likely result in large U.S. refinery run cuts, said Energy Aspects analyst Livia Gallarati.
"Our base case has been that, if tariffs are announced, they will include a grace period for negotiations and that oil is likely eventually to be carved out from any tariffs," Gallarati added.
Canada will respond immediately and forcefully if the United States imposes tariffs, Prime Minister Justin Trudeau said on Friday, warning Canadians that they could be facing tough times.
The market is also awaiting the OPEC+ meeting scheduled for Monday.
OPEC+ is unlikely to alter plans to raise output gradually when it meets on Monday, delegates from the producer group told Reuters, despite Trump urging OPEC and its de facto leader, Saudi Arabia, to lower prices.
Meanwhile, the U.S. oil rig count, an indicator of future production, rose by seven to 479 this week.
(Reporting by Arathy Somasekhar in Houston, Enes Tunagur in London Editing by David Goodman, Rod Nickel and Christina Fincher) - Reuters
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