Gong Xi Fa Cai! Happy Year of the Snake to everyone in the oil market while they anxiously watch the front-month Brent futures contract tread around the low $77/bbl handle on the eve of expiry. The soon-to-be-prompt Apr ’25 Brent futures contract closed below $76/bbl on 29 Jan, where it found support and climbed to $76.40/bbl the following day (at the time of writing). Oil supply balances remain in flux as we await Mr Trump’s tariffs. For President Trump, tariffs are a means to achieve his goals, and he has made evident how far he is willing to go to weaponise them, including causing a near-explosion in the price of coffee in America by almost imposing tariffs on Colombia. It’s too soon, with eggs at record highs since Trump took office (Mr. President obviously does not like breakfast). Also in America, the Fed took a break from “DEI, gender ideology, “green” energy and fake climate change” and decided to maintain its policy rate at 4.25%-4.5%, citing elevated inflation. In Asia, while liquidity dried up for the New Year celebrations, China’s DeepSeek shook the tech industry worldwide, releasing an innovative and inexpensive AI model in a possible paradigm shift for AI. Finally, returning to the oil market, everyone will be awaiting the weekend, with 1 Feb being the White House’s deadline for imposing tariffs. It will be interesting to see how the market will be in the coming week, with calm waters on one side and the rough terrains of a possible trade war on the other.
