Oil Prices Decline Amidst Lower U.S Inventories Draw
Oil prices fell following reports indicating an increase in US oil inventories and ongoing uncertainties surrounding the potential impact of US President Donald Trump’s planned energy policies on global oil demand.
The international benchmark Brent crude fell by 0.1%, trading at $78.22 per barrel. The US benchmark West Texas Intermediate (WTI) decreased by 0.1%, reaching $75.21 per barrel, compared to its prior session close of $75.28.
The downward movement in oil prices was further influenced by data suggesting a rise in US oil stocks, in the world’s largest oil-consuming country. Projections from the American Petroleum Institute (API) indicated an increase in commercial crude oil inventories for the week ending January 17.
API data showed a rise of 1 million barrels, contrary to market expectations of a 2.6 million barrel decline. This build-up in crude reserves reflects market concerns about weakening domestic demand, contributing to downward pressure on prices.
Official figures from the US Energy Information Administration (EIA) are expected later today. If these figures confirm the increase in crude oil inventories, prices are expected to fall further. Meanwhile, uncertainty surrounding the impact of President Trump’s new energy policies on global oil demand continued to weigh on prices.
Trump has suggested the possibility of imposing a 25% tariff on imports from Canada and Mexico, and has set February 1 as the date for imposing a 10% tariff on China. Any economic pressure on China, the world’s largest oil importer, is anticipated to dampen the country’s demand for crude oil.
These expectations have led to predictions of reduced demand from market players, further applying downward pressure on prices. Additionally, Trump has called for increased domestic oil production while relaxing many restrictions on the energy sector in an effort to reduce energy prices and control inflation during his second term.
US oil production, which reached record levels of 13 million barrels per day (bpd) on average last year, is expected to help offset declining output from the Organization of the Petroleum Exporting Countries (OPEC).
The OPEC+ group, consisting of OPEC – led by Saudi Arabia – and non-OPEC producers – led by Russia – is implementing supply cuts of around 5.85 million bpd, including voluntary reductions. #Oil Prices Decline Amidst Lower U.S Inventories Draw Naira Plunges as Banks Resume FX Sales to Customers
