Oil prices edged higher on Wednesday as the dollar weakened, with traders closely watching U.S. inventories, President Donald Trump’s proposed tariffs and the potential impact of the national energy emergency he declared on his first day in office.
Brent crude futures rose 43 cents, or 0.54%, to $79.72 per barrel at 1022 GMT. U.S. West Texas Intermediate crude futures climbed 45 cents, or 0.59%, to $76.28.
Oil is getting support from a marginally weaker U.S. dollar as well as positive risk sentiment with rising equity markets, said UBS analyst Giovanni Staunovo.
The dollar struggled to regain ground against major currencies, hovering close to two-week lows. A weaker dollar usually supports oil prices.
“Some expectations of falling U.S. crude inventories this week are likely lifting prices somewhat as well. The market moves are small, as market participants are still awaiting more clarity on Trump’s next steps on tariffs and sanction policies,” said Staunovo.
Trump said late on Tuesday that his administration was discussing imposing a 10% tariff on goods imported from China on Feb. 1, the same day that he previously said Mexico and Canada could face levies of around 25%.
He also vowed duties on European imports, without providing further details.
“The oil market’s attention is slowly turning away from U.S. sanctions against Russia towards President Trump’s potential trade policy,” said ING analysts, adding that the energy complex has come under pressure with the growing threat of tariffs.
The U.S. president had said his administration would “probably” stop buying oil from Venezuela, among the top suppliers of oil to the country.
Trump laid out a sweeping plan to maximise domestic oil and gas production, including declaring a national energy emergency to speed permitting, rolling back environmental protections, and withdrawing the U.S. from the Paris climate pact.
Trump’s policy is unlikely to spur near-term energy investment or change U.S. production growth, analysts at Morgan Stanley wrote in a note, adding that it could, however, moderate potential erosion of refined product demand.
Meanwhile, a rare winter storm churned across the U.S. Gulf Coast on Tuesday.
Elsewhere, North Dakota’s oil production was estimated to be down by between 130,000 and 160,000 barrels per day (bpd) due to extreme cold weather and related operational challenges, the state’s pipeline authority said on Tuesday.
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