Oil prices jumped while gold fell, and the cryptocurrencies fell in early dealings, in light of the possibilities of a commercial war after US President Donald Trump imposed customs duties on Canada, Mexico and China.
Oil jumps
Oil prices jumped today, Monday, after Trump imposed customs duties on Canada, Mexico and China, but the expectations for the decrease in the demand for fuel limited the gains.
By 00:42 GMT, the West Texas West Texas Raw rose 2% to $ 73.97 a barrel, after reaching the highest level in a week at 75.18 dollars earlier in the session. US crude futures are traded until the report was written at $ 74.2 a barrel.
Brent crude futures increased 1.24% to $ 76.6 a barrel.
The US President imposed customs duties by 25% on imports from Canada and Mexico, and by 10% on China’s imports from tomorrow.
Canada and Mexico responded by the imposition of 25% customs duties on American imports, which threatens the turbulence of the economies of the three countries. While China said it will challenge US customs duties to the World Trade Organization, as well as take counter -action.
White House officials said that Canadian energy products will only impose customs duties by 10%, while Mexican energy imports will be subject to 25%full customs duties.
On the other hand, Amarberrett Singh, an analyst at Barclays, in the note “The relatively flexible position on Canadian energy imports is likely to be cautious.”
“The customs duties are likely to affect Canadian energy imports negatively on the local energy markets more than Mexican energy imports, and may even have a reverse impact on one of the most important goals of the president, which is to reduce energy costs,” he added.
According to the US Department of Energy, Canada and Mexico are the most important sources of US crude imports, and together they form about a quarter of oil that US refineries turn into fuel products such as gasoline and heating fuel.
Sources in the sector have stated that customs duties will raise the costs on the heavier American crude degrees needed by American refineries to achieve optimal production, which reduces their profits and is likely to lead to production cuts.
Sol Cavonica, an energy analyst at MST Market, said that customs duties raise oil prices in the near term due to the risk of supplies, especially for heavy grades.
He added that oil prices may land after the next quarter, as customs duties have caused more demand expectations, and with the exposure of the “OPEC Plus” group to more pressure from Trump to stop production discounts.
Representatives from the Organization of Petroleum Exporting Countries (OPEC) and its allies (OPEC Plus) – Reuters – said that the group is unlikely to change the current plans to gradually increase production when it meets Monday, despite Trump’s pressure.
For his part, the Bank of Goldman Sachs said – in a memorandum yesterday – that the new Trump fees on imports from Canada, Mexico and China are likely to have a limited impact in the near term on global oil and gas prices.
“The possible decrease in US natural gas imports from Canada due to the customs duties is very small, so that it does not significantly raise the prices of American natural gas,” the bank said.
Last week, Goldman Sachs raised his expectations for the Brent crude price for this year, which follows to $ 78 (for previously $ 76) and $ 73 (from $ 71), respectively.
The yellow metal is declining
Gold prices fell in early Asian transactions today under the pressure of the dollar, with fears of a global trade war escalating after the US President imposed large customs duties on Canada, Mexico and China early week.
By 01:13 GMT, gold in immediate transactions decreased 0.6% to $ 2784.84 an ounce. Immediate contracts will be traded at $ 2798.7 the current time.
US gold futures fell 0.3% to $ 2825.80 an ounce. The yellow metal is traded at 2831 dollars until the report is written.
The dollar index has been welcomed near the highest level in 3 weeks, which makes the American currency gold the highest price for buyers from other currencies.
Gold was also negatively affected by reaping gains after price exceeding the level of $ 2800 an ounce for the first time last week, to record the highest level ever at $ 2817.23 an ounce.
As for other precious metals:
- Silver in instant transactions fell 1.2% to $ 30.94 an ounce.
- Platinum fell 1.1% to $ 967.20 an ounce.
- Palladium fell 0.5% to 1003.26 dollars an ounce.
Bitcoin encrypted currency decreased more than 4% in trading today (Reuters)
Current currencies lose
Digital currencies have declined with investors concern about the possibility of a global trade war, and pushing them to move away from risky assets.
Bitcoin declined by more than 4% in early Asian transactions, and touched the lowest level in 3 weeks at about 96 thousand and 606 dollars, before continuing to drop to be traded from 95 thousand dollars at the moment of writing the report.
Ethar’s currency was more than 17% to reach $ 2550.3, and has returned to levels that have not been seen since the beginning of last November.
Nikki Index
On the financial market level, the Japanese index (Nikki) fell by more than 2% today, in the worst session over 4 months, amid the escalation of concerns about the global economy after Trump’s fees.
Nikki fell 2.66% to about 38,520 points, the lowest closure level since January 17. The index also recorded its largest daily decline in the centenary since September 30.
The broader Topix index fell 2.45% to 2720.39 points.
“The Japanese stocks decreased amid uncertainty about the prospects for the global economy, which include fears that Japanese exports will be a possible target of the customs duties policy in the future,” said Kenzaro Hayachi, Dawaya Securities Senior Analysts, “Japanese stocks decreased amid uncertainty about the prospects of the global economy, which includes fears that Japanese exports will be a potential target of Trump’s customs duties policy.”
“If prices also rise in the United States and the dollar’s strength increases, the returns will rise. This may affect the monetary policy in Japan,” he added.
The shares of car manufacturers decreased, as Toyota Motor’s share lost 5%, prompting the Topix index to decline. Honda Motor’s share also fell 7.2%, and Nissan Motor share 5.63%.
