Oil prices saw further declines in Asian trading on Thursday, continuing a trend of losses amid concerns surrounding the potential impact of US President Donald Trump’s proposed tariffs and energy policies, Reuters reports.
Brent crude futures dropped by 38 cents, or 0.5%, to $78.62 per barrel, marking a sixth consecutive day of losses. Meanwhile, US West Texas Intermediate (WTI) crude fell for a fifth straight day, decreasing by 39 cents, or 0.5%, to $75.05.
According to Priyanka Sachdeva, a senior market analyst at Phillip Nova, the oil market’s recent retreat is influenced by a combination of factors. One of the key drivers has been expectations of increased US oil production under Trump’s pro-drilling policies. Additionally, easing geopolitical tensions, particularly in Gaza, have alleviated concerns about supply disruptions from major oil-producing regions.
However, analysts also warn that the broader economic effects of potential US tariffs could hinder global oil demand growth. Trump has signaled plans to impose new tariffs on Russia if the country does not agree to terms ending the war in Ukraine, with the possibility of extending these measures to other countries involved in the conflict. Additionally, Trump has proposed tariffs on the European Union, Canada, Mexico, and China, citing issues such as the fentanyl trade from China to the US.
On Monday, Trump declared a national energy emergency, granting him the authority to reduce environmental regulations on energy infrastructure projects, while also facilitating permitting for new transmission and pipeline initiatives.
Despite these moves, the lack of clarity on the details of Trump’s tariff policies and the anticipated increase in US oil production have led to further concerns about downward pressure on oil prices. Kelvin Wong, a senior market analyst at OANDA, noted in an email that this uncertainty, combined with the potential rise in US oil supplies due to efforts to position the US as a major oil exporter, could result in additional volatility in the near term.
Furthermore, recent US oil inventory data shows an increase in stockpiles, which also weighs on market sentiment. According to American Petroleum Institute figures, crude inventories rose by 958,000 barrels during the week ending January 17. Gasoline inventories climbed by 3.23 million barrels, and distillate stocks increased by 1.88 million barrels.
The market remains on edge as analysts await further developments regarding Trump’s tariff policies and their implications for both the global economy and the oil industry.
