Brent, WTI Dip as Trump Urges OPEC to Lower Prices

Brent crude futures lost 71 cents or 0.9 per cent after the speech to close at $78.29 a barrel and the US West Texas Intermediate crude (WTI) crude futures contracted by 82 cents or 1.09 per cent to $74.62 per barrel.

At WEF in Davos, Switzerland, President Trump announced he would ask Saudi Arabia and OPEC to bring down the cost of oil.

Since he took office, the uncertainty over how Mr Trump’s proposed tariffs and energy policies would affect global economic growth and energy demand have weighed on prices.

He threatened to add new tariffs to his sanctions threat against Russia if the country does not make a deal to end its war with Ukraine.

He also vowed to hit the European Union with tariffs and impose 25 per cent tariffs against Canada and Mexico.

On China, Mr Trump said his administration was discussing a 10 per cent punitive duty because fentanyl is being sent from there to the US.

On Monday, he declared a national energy emergency intended to provide him with the authority to reduce environmental restrictions on energy infrastructure and projects; and ease permitting for new transmission and pipeline infrastructure.

Market analysts say there will be more potential for a downward choppy movement in the oil market in the near term due to the Trump administration’s lack of clarity on trade tariffs policy and the impending higher oil supplies from the US.

Meanwhile, the US Energy Information Administration (EIA) reported an inventory dip of 1 million barrels for the week to January 17. In fuels, the EIA estimated mixed changes.

The change in crude inventories compared with a draw of 2 million barrels for the previous week, which also saw another round of sizable builds in fuels.

This contradicts forecasts by the American Petroleum Institute (API) which showed that on the US oil inventory front, crude stocks rose by 958,000 barrels in the week ending January 17 and added that gasoline (petrol) inventories rose by 3.23 million barrels and distillate stocks climbed by 1.88 million barrels, they said.