Oil Prices Remain Low Amidst Political Uncertainty
Oil prices have remained near their lowest levels of the year as traders exit the market amid concerns surrounding President Donald Trump's policies.
West Texas Intermediate (WTI) traded near $71 a barrel on Wednesday, down 10% from January highs. Investors' hawkish positions on Trump's stance on the Middle East and energy tariffs have dampened sentiment.
A $17 billion net outflow was recorded in the week ending Jan. 31 as investors withdrew from crude and fuel markets, according to a report by JPMorgan Chase & Co. analyst Tracey Allen.
"Traders are pulling bets on crude right now," said Joe DeLaura, former trader and global energy strategist with Rabobank. "We see crude continuing lower until the next geopolitical outburst juices prices again."
The Trump administration's plans to end the Ukraine conflict by next week could potentially ease energy supply disruptions, further weighing on prices. Beijing's retaliation to Trump's levies has also escalated trade tensions between the US and China.
While Trump's moves are largely considered bearish for oil, his positions on the Israel-Gaza conflict and Iran sanctions could cause market volatility. The president has proposed taking over the Gaza Strip and has ordered increased sanctions on Iran.