LONDON: Oil prices edged up on Friday but remained on track for a weekly decline after U.S. President Donald Trump issued a sweeping plan to boost U.S. production and demanded OPEC lower crude prices.
Brent crude futures were up 32 cents, or 0.4%, at $78.61 a barrel at 1011 GMT, while U.S. West Texas Intermediate crude (WTI) was 31 cents higher, also adding 0.4%, at $74.93.
For the week, Brent is down nearly 3% so far, and WTI down close to 4%.
“After a week of Trump being in office, the various executive orders that have been taken are not being disruptive to oil supplies. Most of what he’s done has been with an inward domestic focus,” said Harry Tchilinguiran, group head of research at Onyx Capital Group. “We were looking for pronouncements around tariffs, around Iran, Venezuela and Russia.”
Ahead of the inauguration, the market had built up a net long position in oil futures to hedge in case prices rose from disruptions and this has now started to unwind, Tchilinguiran said.
Trump, during a speech by video link on Thursday to the World Economic Forum in Davos, Switzerland, said he would demand that the Organization of the Petroleum Exporting Countries and its de facto leader, Saudi Arabia, bring down the price of crude.
Oil prices fall as Trump urges lower oil costs, weighs tariff
He also said he would ask Riyadh to increase a U.S. investment package to $1 trillion, up from $600 billion reported by the Saudi state news agency earlier.
“I don’t really expect OPEC will change policy unless there is a change in fundamentals,” said Giovanni Staunovo, commodity analyst at UBS. “Markets will be relatively muted until we get more clarity on sanctions policy and what he does with tariffs.”
Trump declared a national energy emergency on Monday, rolling back environmental restrictions on energy infrastructure as part of a sweeping plan to maximise domestic oil and gas production.
On Wednesday, he vowed to hit the European Union with tariffs and impose 25% tariffs on Canada and Mexico, and said his administration was considering a 10% punitive duty on China.
As attention shifts to a possible February timeline for new tariffs, caution will likely persist in the market as any new trade restrictions will carry negative implications for global growth, potentially weighing on oil demand prospects, said Yeap Jun Rong, market strategist at IG.
Traders expect oil prices to range between $76.50 and $78 a barrel, Yeap added.
While bullish catalysts such as a significant drawdown in U.S. crude stocks are providing temporary positive swings, an over-supplied global market and projections of ailing Chinese demand continue to weigh on crude futures, said Priyanka Sachdeva, senior market analyst at Phillip Nova.
U.S. crude inventories last week hit their lowest since March 2022, according to the U.S. Energy Information Administration.
The EIA report, issued a day late because of a U.S. holiday on Monday, said crude stockpiles fell by 1 million barrels to 411.7 million barrels in the week to Jan. 17, a ninth consecutive weekly decline.
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