Oil Dips Weekly After Trump's Trade Threats and OPEC+ Demand
Oil prices ended the week with their first decline of the year amid President Trump's trade war rhetoric and pressure on OPEC+ to reduce crude prices.
West Texas Intermediate (WTI) settled marginally higher at around $74 a barrel, fluctuating throughout the session. The decline followed President Putin's willingness to discuss Ukraine and oil prices with Trump. Trump had earlier threatened additional sanctions on Russia if Putin failed to negotiate an end to the conflict.
US sanctions on Russian oil have tightened the global market, and their potential relaxation could increase supply for Asian buyers who have sought alternatives. The sanctions were imposed before Trump's term to strengthen Ukraine's position in potential peace talks.
Trump's statements have influenced oil markets since his inauguration. The initial week of his new term featured tariff threats against Canada, Mexico, and China, followed by a demand that OPEC+ "bring down the cost of oil."
"He wants the price lower," said Nadia Martin Wiggen, a director at Svelland Capital. "He wants gasoline prices lower for the consumer and oil prices generally lower than under the Biden administration."
New York futures declined 4.1% this week but remained positive year-to-date due to cold weather in the Northern Hemisphere and Russian sanctions. However, the initial strength in crude and freight markets following the sanctions has subsided.
Trump's executive order this week declared a national energy emergency to boost domestic production. During his first term, he repeatedly urged OPEC+ to lower prices when he deemed them too high and pledged to replenish US oil reserves.