Commodities
Trump threatens EU with tariffs over oil and gas imports
(Reuters) -U.S. President-elect Donald Trump said on Friday the European Union should step up U.S. oil and gas imports or face tariffs on the bloc’s exports that include goods such as cars and machinery.
The EU already buys the lion’s share of U.S. oil and gas exports, according to U.S. government data.
No extra volumes are currently available as the United States is exporting at capacity, but Trump has pledged to further grow the country’s oil and gas production.
“I told the European Union that they must make up their tremendous deficit with the United States by the large-scale purchase of our oil and gas,” Trump said in a post on Truth Social.
“Otherwise, it is TARIFFS all the way!!!,” he added.
The European Commission said it was ready to discuss with Trump how to strengthen what it described as an already strong relationship, including in the energy sector.
“The EU is committed to phasing out energy imports from Russia and diversifying our sources of supply,” a spokesperson said.
The United States already supplied 47% of the European Union’s liquefied imports and 17% of its oil imports in the first quarter of 2024, according to data from EU statistics office Eurostat.
TARIFF THREATS
Trump, who takes office on Jan. 20, has vowed to impose tariffs of 10% on global imports into the U.S. along with a 60% tariff on Chinese goods – duties that trade experts say would upend trade flows, raise costs and draw retaliation against U.S. exports.
The U.S. ran a $208.7-billion goods trade deficit with the EU in 2023, according to U.S. Census Bureau data. Although the U.S. runs a surplus with the EU on services, Trump has focused mainly on goods trade, frequently complaining about the bloc’s car exports to the U.S. with few vehicles shipped east across the Atlantic.
German and Italian car exports currently face a 2.5% U.S. tariff, which could quadruple if Trump makes good on his threats.
Trump has also vowed to authorize hefty tariffs on the top three U.S. trading partners, Mexico, Canada and China, on his first day in office if they fail to stem illegal border crossings into the U.S. and trafficking of the deadly opioid fentanyl.
William Reinsch, a trade expert at the Center for Strategic and International Studies, said the EU could negotiate its way out of Trump’s tariffs.
“This could be a win-win, telling them to buy something they want and need anyway,” Reinsch said.
However, most European oil refiners and gas firms are private and governments have little say on where their purchases come from unless authorities impose sanctions or tariffs. The owners usually buy their resources based on price and efficiencies.
The U.S. is already producing and exporting record volumes of oil and gas and increasing those would require significant investment, especially for LNG export terminals.
Reinsch noted that while there is demand in Europe now for U.S. oil and gas to replace shunned Russian supplies, long-term demand is unclear with the transition to renewable energy sources. Companies will be reluctant to invest if they think current demand is transitory, Reinsch said.
BUYING MORE U.S. ENERGY
The EU has steeply increased purchases of U.S. oil and gas following the block’s decision to impose sanctions and cut reliance on Russian energy after Moscow invaded Ukraine in 2022.
The United States has grown to become the largest oil producer in recent years with output of over 20 million barrels per day of oil liquids, or a fifth of global demand.
exports to Europe stand at around 2 million bpd, representing over half of U.S. total exports, with the rest going to Asia.
The Netherlands, Spain, France, Germany, Italy, Denmark, and Sweden are the biggest importers, according to the U.S. government data.
“Europe is taking close to its maximum capacity for U.S. crude, meaning there is little scope for stronger imports next year,” said Richard Price, oil markets analyst at Energy Aspects. He also said refinery closures in Europe in 2025 won’t help increase imports.
The United States is also the world’s biggest gas producer and consumer with output of over 103 billion cubic feet per day.
The U.S. government projects that U.S. LNG exports will average 12 bcfd in 2024. In 2023, Europe accounted for 66% of U.S. LNG exports, with the UK, France, Spain and Germany being the main destinations.
U.S. oil production growth will likely be slow until 2030, according to the International Energy Agency.
Gas output could meanwhile rise further to meet record U.S. domestic demand and LNG exports could also increase if the government approves more LNG terminals.
The EU imported around 2 bcfd of Russian LNG in 2024 and it could move to ban those supplies and seek replacement from other sources, said Alex Froley, LNG analyst at ICIS.
($1 = 0.9623 euros)
Investing.com– Oil prices slipped slightly lower Monday, as optimism over tighter supplies, amid stricter US sanctions against Russia, was offset by caution before President-elect Donald Trump’s inauguration.
At 07:15 ET (12:15 GMT), expiring in March dropped 0.2% to $80.61 a barrel, while fell 0.1% to $77.31 a barrel.
Crude prices retreated slightly after recording four weeks of strong gains, as traders awaited news from Washington, with volumes limited by the US holiday.
Trump inauguration in focus for tariffs, energy cues
Markets were now focused squarely on Trump’s inauguration later on Monday, with the President-elect having promised increased trade tariffs on top oil importer China.
Trump also reiterated plans to increase US energy production during a Sunday rally, promising to lift regulations on the domestic energy sector.
Higher US production- which already stood close to record highs of over 13 million barrels per day in 2024- could potentially offset the impact of recent sanctions against Russia by keeping global crude supplies underpinned.
Trump has also vowed to dole out expansionary policies during his term- a trend that could underpin demand in the world’s biggest oil importer. US oil demand was a mixed bag in recent months. While cold weather did spur increased demand for heating fuels, it disrupted travel across large swathes of the country during the travel-heavy year-end holidays.
“There is a fair amount of uncertainty across markets coming into this week given the inauguration of President Trump and the raft of executive orders he reportedly is planning to sign. This combined with it being a US holiday today, means that some market participants may have decided to take some risk off the table,” analysts at ING said, in a note.
Oil markets weigh demand, supply outlook
Traders were speculating over a somewhat mixed outlook for oil supply and demand. While recent US sanctions on Russia could limit global supplies, this could be offset by demand remaining soft, especially if Trump imposes steep trade duties on China.
China is the world’s biggest oil importer, and has seen a steady decline in its appetite for crude amid persistent economic weakness.
“Output data from China on Friday shows that refineries increased the amount of they processed by 1.3% year-on-year in December,” said ING. “However, for full-year 2024, refinery activity still fell by 3.6% YoY, reflecting weaker domestic demand. Output and trade numbers suggest that apparent oil demand in December came in at a little more than 13.9m b/d, down from 14m b/d the previous month, but up 0.6% YoY.”
The People’s Bank of China kept its benchmark loan prime rate unchanged, as widely expected, on Monday.
Beijing is expected to ramp up its stimulus measures in the face of trade headwinds under Trump. Recent data also showed China’s economy improved after Beijing doled out its most aggressive round of stimulus measures in late-2024.
Recent gains in oil have also been curtailed by easing tensions in the Middle East, as Hamas and Israel exchanged hostages and prisoners over the weekend under a recently signed ceasefire, which also saw traders attach a smaller risk premium to oil.
(Ambar Warrick contributed to this article.)
By Arunima Kumar
(Reuters) -Oil prices were steady on Monday as traders awaited U.S. President-elect Donald Trump’s inauguration in the hope of some clarity on his policy agenda, including plans to end the Russia-Ukraine war.
futures dropped 37 cents, or 0.46%, to $80.42 a barrel by 1004 GMT. U.S. West Texas Intermediate (WTI) crude futures were down 24 cents, or 0.31%, at $77.64.
The more active U.S. WTI crude March contract fell 36 cents to $77.03.
The focus is what executive orders Donald Trump will sign over the next 24 hours, said UBS analyst Giovanni Staunovo.
Charalampos Pissouros at broker XM, meanwhile, said that oil prices were trading a little lower on expectations that Trump will relax energy-related sanctions against Russia in exchange for an end to the war in Ukraine
Trump, who will be inaugurated later on Monday, is widely expected to make a flurry of policy announcements in the first hours of his second term, including an end to a moratorium on U.S. liquefied (LNG) export licences as part of a wider strategy to strengthen the economy.
The Brent and WTI benchmarks advanced more than 1% last week for a fourth consecutive weekly gain after the Biden administration sanctioned more than 100 tankers and two Russian oil producers.
That led to a scramble by top buyers China and India for prompt oil cargoes and a rush for ship supply as dealers of Russian and Iranian oil sought unsanctioned tankers for oil shipment.
While the new sanctions could cut supply from Russia by nearly 1 million barrels per day (bpd), recent price gains could be short lived depending on Trump’s actions, ANZ analysts said in a client note.
Trump has promised to help to end the Russia-Ukraine war quickly, which could involve relaxing some curbs to enable an accord, they said.
Easing tension in the Middle East also kept a lid on oil prices. Hamas and Israel exchanged hostages and prisoners on Sunday that marked the first day of a ceasefire after 15 months of war.
(Reuters) – Goldman Sachs on Monday said the market is pricing in odds of about 50% that there will be a 10% U.S. tariff on the metal by the end of the first quarter of this year.
Analysts at the U.S. investment bank said in a client note that the estimate is similar to their own 50% subjective probability of a 10% effective tariff on copper by year-end.
Three-month copper on the London Metal Exchange eased 0.3% to $9,167 a metric ton as at 0706 GMT after reaching a one-month peak last week. [MET/L]
President-elect Donald Trump returns to the White House later in the global day with an inauguration speech which traders will parse for policies to be enacted on day one. Trump has talked of tariffs of as much as 10% on global imports as well as 60% on Chinese goods and a 25% import surcharge on Canadian and Mexican products.
Goldman also noted that the oil market is pricing in a nearly 40% chance of a 25% U.S. tariff on Canadian goods including oil, versus the bank’s 15% subjective probability of a 25% effective tariff by the end of the year.
futures traded around $80.69 a barrel, while the more active U.S. West Texas Intermediate crude April contract was steady at $77.36. [O/R]
The investment bank assigned a 10% chance to a 10% effective tariff on gold being introduced within the next 12 months. It said bullion’s status as a financial asset makes it likely to be exempt from broad-based tariffs.
prices were up 0.3% at $2,708.77 per ounce while U.S. were little changed at $2,749.70. [GOL/]
The amount of gold stocks in COMEX-approved warehouses has jumped by one-third in the past six weeks as market players sought deliveries to hedge against the possibility of tariffs.
Forex2 years agoForex Today: the dollar is gaining strength amid gloomy sentiment at the start of the Fed’s week
- Forex2 years ago
How is the Australian dollar doing today?
- Forex2 years ago
Unbiased review of Pocket Option broker
- Forex2 years ago
Dollar to pound sterling exchange rate today: Pound plummeted to its lowest since 1985
- Cryptocurrency2 years ago
What happened in the crypto market – current events today
- World2 years ago
Why are modern video games an art form?
- Commodities2 years ago
Copper continues to fall in price on expectations of lower demand in China
- Forex2 years ago
The dollar is down again against major world currencies
