Oil Prices Drop Amidst Trade War Concerns and White House Intervention
Key Highlights:
* Oil prices poised for first weekly decline of 2025.
* President Trump's trade war threats and request for Saudi Arabia and OPEC to lower oil prices impact futures.
* US crude stockpiles fall for ninth consecutive week.
Oil prices are trending downward this week, marking the first weekly decline of the year. The catalyst for this movement lies in President Donald Trump's recent statements and actions.
During his first week in office, Trump threatened tariffs on Canada, Mexico, and China. Additionally, he pledged to request that OPEC, the producer group, lower oil prices. These announcements have weighed on futures, leading to their largest weekly loss since November.
Despite the downward trend, oil prices remain higher year-over-year, driven by increased heating demand in the Northern Hemisphere and US sanctions on Russia. Trump has threatened further penalties against Moscow if President Vladimir Putin does not agree to end the ongoing conflict in Ukraine.
Experts believe persuading OPEC to increase output will be challenging. Moreover, lower oil prices could hinder the significant growth of US oil production.
Trump signed an executive order this week declaring a national energy emergency to bolster domestic production. In his previous term, Trump consistently pressured OPEC+ to reduce prices when he deemed them excessive.
Meanwhile, US crude stockpiles have declined for nine consecutive weeks, according to the Energy Information Administration's report. Inventories are now below the five-year seasonal average for this time of year, contradicting earlier industry estimates of a build.