Oil Drops as Trump Targets Lower Prices to Pressure Russia
In the global commodity market, prices of crude oil declined on Friday as concerns over slowing demand in the US and a looming global supply glut overshadowed the Federal Reserve’s latest rate cut.
Brent crude traded at $66.87 a barrel, down 0.36% from the previous close of $67.11. The US benchmark West Texas Intermediate (WTI) decreased by 0.46% to $63.02 from $63.31 in the prior session.
Oil drifted for a third straight session in the early trading session following the latest comments from President Donald Trump who called for lower oil prices to pressure Moscow to end the war in Ukraine.
Trump said the war would end “if the price of oil comes down,” and repeated calls for countries to stop buying fuel from the OPEC+ member.
On the other hand, upside risks for oil continue following the recent attacks on Russian energy infrastructure by Ukraine.
The Fed lowered its policy rate by 25 basis points on Wednesday, signaling more cuts ahead. Fed Chair Jerome Powell called it a “risk-management cut” to shield the economy from labor market weakness.
Normally lower borrowing costs support oil demand, but traders remained focused on weak economic signals and lackluster consumption forecasts. Lower borrowing costs typically boost demand for oil and push prices higher.
However, broader concerns about economic weakness, along with weak demand forecasts, limit expectations for a near-term rebound, while planned OPEC+ output hikes and rising US fuel inventories are adding to oversupply concerns.
Meanwhile, Australia announced new measures Thursday to curb Russia’s oil revenues, including lowering the price cap on Russian oil and sanctioning additional “shadow fleet” vessels, easing some supply concerns and partially offsetting downward pressure on prices.
Moreover, US President Donald Trump said in an interview with Fox News on Thursday that Europe could end the Russia-Ukraine war by imposing sanctions or tariffs on China and urged a rapid halt to Russian oil imports, actions he argues would weaken the Kremlin’s war effort. Such moves could tighten global oil supply.
EIA weekly gas storage data shows that US gas stocks rose by 90Bcf last week, higher than the average market expectations of a build of around 80bcf.
This was also well above the five-year average addition of 74Bcf for this time of the year. The bigger-than-average increase was largely due to the forecasts for cooler forecasts for late September.
Total gas stockpiles totalled 3.43Tcf as of 12 September, which is 6.3% above the five-year average. The front-month Henry Hub contract traded under pressure and hovered around US$2.9/MMBtu in the early trading session today. #Oil Falls as Trump Targets Lower Prices to Pressure Russia Investment: CBN to Open N290bn Treasury Bills for Subscription
