MARKET NEWS

By Yongchang Chin

(Bloomberg) -- Oil steadied after a weekly loss as traders weighed President-elect Donald Trump’s threat to reimpose control over the Panama Canal.

Brent crude traded near $73 a barrel after declining by 2.1% decline last week, while West Texas Intermediate held around $70. Trump said the key waterway — through which roughly 2% of global oil supply flows — is charging “exorbitant” fees, a claim that Panama’s president rebuffed. 

The criticism of Panama follows threats by Trump to impose tariffs on Canada, Mexico and China — as well as on the European Union if the bloc doesn’t buy more US oil and natural gas. The increased uncertainty has failed to jolt crude out of a narrow range it has traded in since mid-October, with lackluster demand in China and expectations of ample supply tempering gains.

“Trump’s threats and rhetoric on the international scene are mostly noise for the oil markets at this point,” said Vandana Hari, founder of Vanda Insights in Singapore. “Given the thin trading and lack of strong cues, I expect crude to slide sideways into the year-end.”

Hedge funds, however, have shown some signs of growing more bullish on the outlook for crude, with the increase in net-longs for the US marker WTI rising by the most in over a year in the week to Dec. 17, according to exchange data. That came after prices rallied on the prospect of sanctions that would reduce supplies of Russian and Iranian oil.