US oil prices fell by more than $1 a barrel in early Asian trading on Tuesday as President Donald Trump took office and announced a plan to maximize US oil and gas production by declaring a national emergency.
Trump signed an executive order on Monday aimed at boosting domestic energy production, aiming to make the United States "energy independent" and reduce its reliance on foreign oil. The order calls for a review of regulations that hinder oil and gas production on federal lands and waters, and for the construction of new pipelines to transport oil and gas.
The executive order also directs the Environmental Protection Agency to review the Clean Power Plan, the Obama administration's signature environmental regulation aimed at reducing carbon emissions from power plants.
The order is likely to be met with legal challenges from environmental groups. However, it is a clear indication of the Trump administration's commitment to boosting domestic energy production.
The decline in oil prices on Tuesday follows a sharp rise in prices in recent months, as investors bet on increased demand from China and other major economies. The price of Brent crude, the international benchmark, rose to $79.57 a barrel on Monday, its highest level since November 2014.
However, the Trump administration's plans to boost domestic production are likely to put downward pressure on oil prices in the long term. By increasing the supply of oil on the market, the United States will be competing with other major oil producers such as Saudi Arabia and Russia. This increased competition could lead to lower prices for consumers and businesses.