HOUSTON: Oil prices slipped on Monday as U.S. President-elect Donald Trump’s inauguration is expected to bring a flurry of policy announcements that may clarify how he plans to end the Russia-Ukraine war, boost U.S. oil and gas production and lower costs for consumers.
Brent crude futures declined by $1.23, or 1.5%, to $79.58 by 10:57 a.m. EST (15:57 GMT). U.S. West Texas Intermediate crude futures slipped by $1.58, or 2%, to $76.30.
The more active WTI crude March contract was down $1.35, or 1.7%, at $76.05. There will be no settlement for WTI contracts due to the U.S. Martin Luther King Jr. Day holiday.
Trump will sign an executive order declaring a national energy emergency aimed at increasing U.S. oil and gas production, lowering costs for U.S. consumers and boosting U.S. competitiveness, an incoming White House official said on Monday.
Trump, who vowed during his election campaign to “drill, baby, drill,” will also sign an executive order focused on Alaska, the official said, adding that the state was critical to U.S. national security and could allow shipments of liquefied natural gas to other parts of the United States and to allied countries.
The focus is what executive orders Trump will sign over the next 24 hours, said UBS analyst Giovanni Staunovo.
PVM oil analyst Tamas Varga said the price declines were because of uncertainty over the incoming president’s policies.
Trump, who will be inaugurated on Monday, is expected to make policy announcements that include an end to a moratorium on LNG export licences as part of a wider strategy to strengthen the economy.
The Brent and WTI benchmarks advanced more than 1% last week for a fourth-consecutive weekly gain after the Biden administration imposed sanctions on more than 100 tankers and two Russian oil producers.
That led to a scramble by top buyers China and India for prompt oil cargoes and a rush for ship supply, as dealers of Russian and Iranian oil sought tankers not under sanctions for oil shipment.
While the new sanctions could cut supply from Russia by nearly 1 million barrels per day, recent price gains could be short-lived depending on Trump’s actions, ANZ analysts said in a client note.
Trump has promised to help to end the Russia-Ukraine war quickly, which could involve relaxing some curbs to enable an accord, they said.
Russian President Vladimir Putin congratulated Trump on taking office hours before Trump’s inauguration in Washington and said he was open to dialogue with the new U.S. administration on Ukraine and nuclear arms.
Easing tension in the Middle East also kept a lid on oil prices. Hamas and Israel exchanged hostages and prisoners on Sunday that marked the first day of a ceasefire after 15 months of war.
Yemen’s Houthis will target only Israel-linked vessels following the Gaza ceasefire, the Sanaa-based Humanitarian Operations Coordination Center said.
Trump will also issue a broad trade memo on Monday that stops short of imposing new tariffs on his first day in office, but rather directs federal agencies to evaluate U.S. trade relationships with China, Canada and Mexico, an incoming Trump administration official said.
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