U.S. tariff threat limits oil prices

Oil prices were held in check on Thursday by threatened U.S. tariffs on Canadian and Mexican crude that could take effect this weekeend.

Brent crude futures were up 27 cents at $76.85 a barrel at 11:05 a.m. CST (1705 GMT). U.S. crude futures were up 13 cents to $72.75. U.S. crude futures had settled at their lowest price this year on Wednesday.

"We're getting close to the deadline and people are getting nervous," said Phil Flynn, senion analyst with Price Futures Group.

U.S. President Donald Trump has threatened to impose a 25% tariff as early as Saturday on Canadian and Mexican exports to the United States if those two countries do not end shipments of fenatanyl across U.S. borders.

The White House on Tuesday reaffirmed Trump's plan to impose 25% tariffs on imports from Canada and Mexico. On Wednesday, the president's nominee to run the Commerce Department said the two countries can avoid this if they act swiftly to close their borders to fentanyl.

However, IG market analyst Tony Sycamore said traders had already priced in Trump's tariffs: "(this is) a major reason why crude oil is trading where it is."

Winter storms hit U.S. demand last week, with crude oil stockpiles in the U.S. rising by 3.5 million barrels as refiners cut production. Analysts had expected a 3.2 million-barrel rise, according to a Reuters poll.

On the supply side, the latest U.S. sanctions on Moscow are squeezing crude oil exports from Russia's western ports, which are set to fall 8% in February from the January plan as Moscow boosts refining, traders said and Reuters calculations showed.