Oil Prices Drop Amid Trump's Production Push and Trade War Fears
Oil prices declined on Tuesday, influenced by President Donald Trump's executive orders that aim to boost domestic energy production and his potential tariffs against trading partners Canada and Mexico.
Production Expansion
Trump declared a national energy emergency, granting expedited approvals for oil and gas leasing, production, and transportation. He also signed an order facilitating resource exploration in Alaska.
Trade War Concerns
Trump expressed plans to impose tariffs on Canada and Mexico, which sparked fears of a trade war that could impact economic growth and oil consumption. Analysts at Goldman Sachs warn that retaliatory measures could follow.
Paris Agreement Withdrawal
Trump withdrew the US from the Paris Climate Agreement, which aims to mitigate global warming. He also plans to replenish the Strategic Petroleum Reserve, which was depleted during the Biden administration after the Russian invasion of Ukraine.
Price Movement
West Texas Intermediate (WTI) futures fell over 2% to $76.89 per barrel, while Brent crude futures declined by more than 1% to $79.29. Since the beginning of the year, WTI has gained over 6%, while Brent crude has risen by more than 5%.