Oil Prices Drop as Trump Announces Trade War Fears
Oil prices declined significantly on Tuesday after President Donald Trump signed executive orders aimed at boosting domestic production and hinting at tariffs against Canada and Mexico.
Falling Prices
West Texas Intermediate (CL=F) fell by over 2%, closing at $76.89 per barrel. Brent (BZ=F) also declined by more than 1%, settling at $79.29.
Trump's Executive Orders
On his first day in office, Trump declared a national energy emergency, expediting approvals for oil and gas development. He also ordered the acceleration of resource extraction in Alaska.
Tariffs Concerns
Trump's announcement of potential tariffs on Canada and Mexico raised concerns about a trade war. Goldman Sachs analysts warned that retaliation from trading partners could impact economic growth and oil consumption.
Withdrawal from Paris Climate Agreement
Trump withdrew the US from the Paris Climate Agreement, an international treaty designed to address climate change. He also intends to refill the Strategic Petroleum Reserve, which was depleted under the Biden administration.
Outlook
Despite the decline on Tuesday, oil prices have been on an upward trend since the start of the year, supported by cold temperatures and US sanctions against Russian energy. WTI has gained over 6% year-to-date, while Brent has increased by more than 5%.