The Oil market is under pressure in early-morning trading today, amid a broader risk-off move. President Trump threatened a 10% tariff on several European countries that oppose his Greenland plans. These tariffs would kick in on 1 February and increase to 25% on 1 June, until a deal for the US to acquire Greenland is reached, ING's commodity experts Ewa Manthey and Warren Patterson note.

Flat prices weaken, Brent spreads stay firm

"Reports suggest the EU is set to halt the EU-US trade deal and potentially revive a EUR93bn tariff package on US goods. There’s also a push from France for the EU to use its anti-coercion instrument against the US. This would restrict US access to the EU single market. There will likely be plenty of noise this week around these developments, particularly as both world and business leaders gather for the World Economic Forum in Davos."

"Despite the pressure on flat price, the prompt ICE Brent time-spread remains firm, suggesting some tightness in the spot physical market. If forecasts of a large surplus are correct, we should see spreads come under pressure, along with weakness in the flat price."

"The latest positioning data shows that speculators increased their net long in ICE Brent by 85,496 lots over the last reporting week to 208,461 lots as of last Tuesday. This is the largest position held since September. This move was predominantly driven by fresh buying amid growing supply concerns from Iran, given the recent protests in the country and the potential for US intervention. Although these concerns have subsided in recent days."