Global crude oil prices settled slightly higher in the previous session but logged a weekly decline, snapping a four-week winning streak, after US President Donald Trump announced sweeping plans to boost domestic crude oil production in the US while demanding that the Organisation of Petroleum Exporting Countries (OPEC) move to lower crude oil prices.
Brent crude futures settled up 21 cents, or 0.27 per cent, to $78.50 a barrel. US West Texas Intermediate crude (WTI) settled up four cents, or 0.05 per cent, to $74.66. Brent lost 2.8 per cent this week, while WTI declined 4.1 per cent in the last five days. Back home, crude oil futures last settled 0.86 per cent lower at ₹6,428 per barrel on the multi-commodity exchange (MCX).
-US President Trump on Friday reiterated his call for OPEC to reduce the crude oil prices to hurt oil-rich Russia's finances and help bring an end to the war in Ukraine. "One way to stop it quickly is for OPEC to stop making so much money and drop the price of oil ... that war will stop right away," Trump said as he landed in North Carolina to view the storm damage.
-Commodity market analysts said the threat of harsh US sanctions on Russia and Iran, which are key oil producers, could undermine Trump's goal of lowering energy costs. On Thursday, Trump told the World Economic Forum he would demand that OPEC and its de facto leader, Saudi Arabia, bring down crude prices.
-OPEC and its allies (OPEC+), which includes Russia, have yet to react, with delegates from the group pointing to a plan already in place to start raising oil output from April. Analysts do not expect OPEC to change the crude oil policy unless there is a change in fundamentals. Markets will be relatively muted until investors get more clarity on sanctions policy and tariffs.
Chevron said on Friday it had started production at a $48 billion expansion of the giant Tengiz oilfield. This will bring its output to around one per cent of the global crude supply and could pressure OPEC's efforts in the last few years to limit production. The US Energy Information Administration said the US crude inventories hit their lowest level last week since March 2022.
-US President Trump declared a national energy emergency on Monday, rolling back environmental restrictions on energy infrastructure as part of his plans to maximize domestic oil and gas production. These rollbacks could support oil demand but have the potential to exacerbate oversupply.
-Trump's policies so far have largely followed predictions on the supply side, including cutting red tape to promote domestic supply growth. The US president vowed to hit the European Union (EU) with tariffs and impose 25 per cent tariffs on Canada and Mexico. He also said his administration was considering a 10 per cent punitive duty on China.
Also Read: India needs more oil, may scale up energy purchases from US: Petroleum Minister Hardeep Singh Puri
Experts say that as attention shifts to a possible February timeline for new tariffs, caution will likely persist in the market, given potential negative implications for global growth and oil demand prospects. Traders expect oil prices to range between $76.50 and $78 a barrel.
While bullish catalysts such as a significant drawdown in US crude stocks are providing temporary positive swings, an over-supplied global market and projections of ailing Chinese demand continue to weigh on crude futures," Priyanka Sachdeva, senior market analyst at brokerage Phillip Nova, told news agency Reuters.
Analysts noted that crude oil marked the worst week since November 2024, following President Trump's call for lower crude prices. At the Davos forum, Trump announced plans to press Saudi Arabia and OPEC to lower oil prices, aligning with his administration's energy development priorities.
"This fuelled market pessimism, as traders remained concerned about the impact of Trump's proposed tariffs on global growth and energy demand. We expect crude oil prices to remain volatile. It has support at $73.80-73.10 and resistance at $74.80-75.40 today. In INR, oil has support at ₹6,420-6,370 while resistance is ₹6,550-6,630," said Rahul Kalantri, VP of Commodities, Mehta Equities Ltd.
Trump promised lower taxes to global elites who bring manufacturing to the US and threatened tariffs on those who do not, fueling concerns about potential trade wars. According to Kaynat Chainwala, AVP-Commodity Research, Kotak Securities, oil prices have been highly volatile in January, surging to $80.70 per barrel in mid-January over unprecedented US sanctions on Russia.
"However, the Gaza ceasefire, Trump’s push to boost US oil production, and concerns that potential US tariffs on China and the EU could reduce oil demand have caused a sharp pullback in prices. Crude oil prices logged the first weekly drop of 2025 after Trump’s tariff threats, his push for higher US oil output, and his vow to ask OPEC to "bring down the cost of oil" kept traders on edge," added Chainwala.
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