Oil fluctuated as investors reacted to rapid-fire moves on trade by the Trump administration, with the US threatening, and then holding off, a broad package of curbs against Colombia.

Brent dropped below $78 a barrel, but pared a deeper intraday loss, while West Texas Intermediate was near $74. Following a dispute over migrants, President Donald Trump first ordered tariffs against Bogota, before the White House paused the actions as Colombia agreed to all Trump's conditions. The US dollar, meanwhile, pushed higher, weighing on most commodities.

Crude remains higher this year, after an earlier round of sanctions from the US on Russian oil and energy lifted physical prices, spurring some refiners in Asia to look for alternative supplies. Traders are now adjusting to a shifting mosaic of potential US actions against trade partners as Trump starts his second term. 

Aside from Colombia, the US president has threatened action against China, Canada, Mexico and the European Union, while also urging OPEC to help lower prices. He's argued that oil's decline could starve Russia of revenue and put a halt to Vladimir Putin's war in Ukraine.

"Trump's actions matter to markets as it shows he is clearly credible on the use of aggressive tariffs," said Chris Weston, head of research for Pepperstone Group. There are "increased tailwinds" for Trump's pursuits of lower oil prices as trade curbs enter into greater focus, he said.

Colombia — which at one point ordered retaliatory sanctions — is the US's fourth-biggest source of overseas oil, topping countries like Brazil, according to the Energy Information Administration. The latest data showed Colombia shipping more than 215,000 barrels a day to US ports.

Brent for March settlement fell 0.7% to $77.93 a barrel at 1:14 p.m. in Singapore.

Earlier, Brent lost as much as 1.2%.

WTI for March delivery shed 0.8% to $74.06 a barrel.

Source : Bloomberg