OPEC+ sticks to output policy, Goldman Sachs eyes limited impact of Trump’s tariffs on crude oil; Brent, WTI gain 3% | Stock Market News

Oil prices edged lower on Monday after rising more than $1 earlier in the session after the United States and Mexico announced a month-long pause on tariffs the U.S. had slapped on its southern neighbour.

U.S. President Donald Trump had imposed tariffs on Canada, Mexico and China to take effect from Tuesday, raising fears of supply disruption.

Brent crude futures were down 14 cents, or 0.2%, at $75.49 a barrel by 10:57 a.m. ET (1557 GMT), having earlier touched a peak of $77.34.

U.S. West Texas Intermediate crude futures were down 4 cents, or 0.01%, at $72.49 after climbing as much as 3.7% earlier in the session to reach their highest since Jan. 24 at $75.18.

U.S. President Donald Trump on Monday said he would pause tariffs planned for Mexico and that negotiations would continue to reach a “deal” between the two countries.

Mexican President Claudia Sheinbaum said U.S. and Mexico teams have started to work on Monday on security and business, adding that she proposed the pause in tariffs to Trump.

Trump’s sweeping tariffs on goods from Mexico, Canada and China had threatened to kick off a trade war that could dent global growth and reignite inflation.

The tariffs announced at the weekend included a 25% levy on most goods from Mexico and Canada, with a 10% tariff on energy imports from Canada and a 10% tariff on Chinese imports.

“Tariffs on Canadian energy imports would likely be more disruptive for domestic energy markets than those on Mexican imports and might even be counterproductive to one of the president’s key objectives – lowering energy costs,” Barclays analyst Amarpreet Singh said in a note.

Canada and Mexico are the top sources of U.S. crude imports, together accounting for about a quarter of the oil U.S. refiners process into fuels such as gasoline and heating oil, according to the U.S. Department of Energy.

Tariffs will raise costs for the heavier crude grades that U.S. refineries need for optimum production, industry sources said.

Gasoline pump prices in the U.S. are certainly expected to rise with the loss of crude for refineries and the loss of imported products, said Mukesh Sahdev at Rystad Energy.

Trump has already warned that the tariffs could cause “short-term” pain for Americans.

U.S. gasoline futures were 1.5% higher at $2.09 a gallon after touching their highest level since Jan. 16 at $2.169.

OPEC agreed to stick to its policy of gradually raising oil output from April on Monday and removed the U.S. government’s Energy Information Administration from the sources used to monitor its production and adherence to supply pacts.

The new tariffs imposed by U.S. President Donald Trump on imports from Canada, Mexico, and China are likely to have a limited near-term impact on global oil and gas prices, Goldman Sachs said in a note on Sunday.

“Potential tariff-driven decline in U.S. natural gas imports from Canada is too small to significantly raise U.S. natural gas prices,” the bank said.

Oil and gas prices jumped on Monday after Trump imposed tariffs over the weekend. The tariffs, which will take effect on Feb. 4, include a 25% levy on most goods from Mexico and Canada, with a 10% tariff on energy imports from Canada, and a 10% tariff on Chinese imports.

“Canadian oil producers are expected to eventually bear most of the burden of the tariff with a $3 to $4 a barrel wider-than-normal discount on Canadian crude given limited alternative export markets, with U.S. consumers of refined products bearing the remaining $2 to $3 a barrel burden,” the bank said.

According to the note, seaborne oil imports from Canada and Mexico will be rerouted to other markets, with the U.S. replacing those supplies with crude from OPEC, Latin America, and refined products from Europe.

The investment bank kept its 2025/2026 oil price forecasts unchanged, expecting minimal near-term price impact due to stable global oil production and demand, as well as the Canadian oil tariff already being priced in.

Last week, Goldman Sachs raised Brent oil price forecast for this year and 2026 to $78 (versus $76 previously) and $73 (from $71), respectively.

Trump said he would talk with leaders of Canada and Mexico, which have announced retaliatory tariffs of their own, but downplayed expectations that they would change his mind.

In a separate note, Goldman Sachs analysts said that U.S. tariffs on Mexico and Canada will be short-lived.

OPEC+ agreed to stick to its policy of gradually raising oil output from April on Monday and removed the U.S. government’s Energy Information Administration from the sources used to monitor its production and adherence to supply pacts.

OPEC+ and Donald Trump clashed repeatedly during his first administration in 2016-2020 when the U.S. President demanded it raise production to compensate for the drop in Iranian supply that resulted from U.S. sanctions.

Since returning to office in January, Trump has already called on the Organization of the Petroleum Exporting Countries to bring down prices, saying elevated prices have helped Russia continue the war in Ukraine.

Russia’s Deputy Prime Minister Alexander Novak said the group of ministers from OPEC and allies led by Russia (OPEC+) discussed Trump’s call to raise production, and agreed OPEC+ will start boosting output from April 1 in line with previous plans.

An online meeting of the OPEC+ group called the Joint Ministerial Monitoring Committee also changed the list of consultants and other firms OPEC+ uses to monitor its production, known as secondary sources.

“After thorough analysis from the OPEC Secretariat, the Committee replaced Rystad Energy and the Energy Information Administration (EIA) with Kpler, OilX, and ESAI, as part of the secondary sources used to assess the crude oil production and conformity,” OPEC+ said in a statement.

One OPEC+ source said the removal of EIA data was because the agency was not communicating on the information required and that the decision was not driven by politics. The U.S. government did not immediately respond to a request for comment.

OPEC+ uses secondary sources to help monitor its output as a legacy of historic OPEC disputes about how much oil members were pumping and occasionally alters the list.

In March 2022, OPEC+ dropped the International Energy Agency as a secondary source, a decision OPEC+ sources at the time said was driven by Saudi Arabia, reflecting concern about U.S. influence on the watchdog’s figures.

Monday’s meeting coincided with a rise in oil prices after Trump imposed tariffs on Mexico, Canada and China, America’s top trading partners, raising concern about supply disruption.

Prices, however, have yet to return to the level of $83 a barrel hit on Jan. 15 because of concern about the impact of U.S. sanctions on Russia.

OPEC+ is cutting output by 5.85 million barrels per day (bpd), equal to about 5.7% of global supply, agreed in a series of steps since 2022.

In December, OPEC+ extended its latest layer of cuts through the first quarter of 2025, pushing back a plan to begin raising output to April. The extension was the latest of several delays due to weak demand and rising supply outside the group.

Based on that plan, the unwinding of 2.2 million bpd of cuts – the most recent layer – and the start of an increase for the United Arab Emirates, begins in April with a monthly rise of 138,000 bpd, according to Reuters calculations.

The hikes will last until September 2026. Based on OPEC+’s previous practice, a final decision to go ahead with the April hike is expected around early March.