(Bloomberg) — Oil slid as risk-off sentiment in wider markets and the Trump administration’s rapid-fire trade moves rattled investors.
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West Texas Intermediate fell more than 1% to below $74 a barrel, tumbling alongside equities as concerns about Chinese artificial-intelligence startup DeepSeek fueled a rout in US stock markets. Adding to the headwinds, economic activity in China, the world’s largest oil importer, faltered at the start of the year and factory activity shrank.
President Donald Trump also unsettled markets by ordering tariffs against Colombia because of a dispute over migrants before the pausing the actions after the country agreed to his conditions. Trump has also threatened action against China, Canada, Mexico and the European Union, while urging OPEC to help lower prices. He has argued that a decline in oil could starve Russia of revenue and help put a halt to the war in Ukraine.
Crude is still slightly higher for the year, driven by cold weather and sanctions on Russian oil that are spurring refiners in Asia to snap up alternative barrels. Those purchases have left key market gauges known as timespreads flashing strength, with the nearest contracts markedly higher than the ones further along.
“We could have expected that, once week one has passed, we should have seen a stronger unwind in prices, but that is not the case,” said Harry Tchilinguirian, group head of research at Onyx Capital Group. “The tightness in the underlying physical market is still holding the Brent complex higher, just look at the strength in Brent spreads.”
Meanwhile, output at Iraq’s giant Rumaila oil field remains reduced by about 300,000 barrels a day after a fire last week, an official said. That was partly offset by rising production in Kazakhstan, where output hit a record of more than 2 million barrels a day on Sunday, according to a spokeswoman for the country’s energy ministry.
In Russia, the Ryazan oil refinery has suspended operations after an attack by Ukrainian drones late last week, Reuters reported.
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