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Oil prices rose Thursday afternoon after the announcement that the United States could consider postponing tariffs that they threatened to impose on their neighbor in Latin America, according to Bloomberg.
The threat of tariffs on Mexican products came as US President Donald Trump tried to stop the flow of migrants into the United States.
At 3:12 pm EST, WTI was trading up from $ 0.99 to $ 52.67 (+ 1.92%), while Brent was trading up $ 1.14 to $ 61.77 (+ 1.88%).
The former Secretary of Commerce, Carlos Gutierrez, had stated that he expected the 5% version of customs duties to be imposed on Monday because Mexico would not have had time to develop a plan for immigration, according to CNBC.
Art Cashin of UBS Financial Services told CNBC Thursday that the market would tolerate the imposition of the tariff in Mexico – it simply would not tolerate it if it lasts. He expects that rates will not last more than a week.
"They think it may be too late to postpone or change it, so they will be forced. But they assume they will come in a week, "Cashin told CNBC.
The original plan was to eventually increase tariffs to 25% by October, with additional increases if Mexico failed to implement a plan to prevent migrants from entering the United States en masse. .
Related: Oil has had its worst period since 2008
The United States imported an average of 712,000 barrels of crude oil and petroleum products per day in March 2019, according to the Energy Information Administration (EIA), most of which is crude oil. The value of oil imported from Mexico to the United States totaled about $ 15 billion in 2018.
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US refineries depend on this Mexican crude oil – which is of the greatest variety – especially now that its other sources, such as Venezuela – also heavy crude oil – have dried up. Canada's supply – including heavy crude oil – is also already saturated due to pipeline constraints. Saudi Arabia also produces heavy oil, but has reduced shipments to the United States in line with its desire to meet the production cut quota it had announced as an OPEC member.
By Julianne Geiger for Oilprice.com
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