Oil prices experienced a 1% decline on Thursday following President Donald Trump’s call for Saudi Arabia and OPEC to reduce oil costs during his address at the World Economic Forum. The announcement, made in Davos, Switzerland, sparked immediate market reactions amid ongoing uncertainties over global economic growth and energy demand under Trump’s proposed tariffs and energy policies.
Brent crude futures settled at $78.29 per barrel, down 0.9%, while U.S. West Texas Intermediate crude (WTI) settled at $74.62, a decrease of 1.09%. Analysts noted that Trump’s directive, aimed at easing the financial burden on consumers and businesses, was met with caution from U.S. oil producers and global suppliers alike.
Clay Seigle, senior fellow for energy security at the Center for Strategic and International Studies, emphasized the potential mixed impact of lower oil prices, highlighting concerns within the energy industry regarding the economics of new investment projects.
The Energy Information Administration (EIA) reported a decrease in U.S. crude oil stockpiles to their lowest levels since March 2022, despite a slowdown in refining activity. However, the inventory drawdown fell short of analyst expectations. Distillate inventories declined while gasoline inventories saw an increase, according to the EIA.
Looking ahead, Priyanka Sachdeva, senior market analyst at brokerage Phillip Nova, pointed out that broader economic implications stemming from U.S. tariffs could further dampen global oil demand growth.
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Trump’s recent policy declarations, including new tariffs on Russia, the European Union, Canada, Mexico, and China, have added to market volatility and uncertainty. His administration’s approach to trade policies and energy infrastructure has contributed to mixed expectations in the oil market, according to Kelvin Wong, senior market analyst at OANDA.
As the oil market navigates these uncertainties, traders and analysts remain attentive to developments surrounding Trump’s trade policies and their potential impacts on global oil supplies and prices in the near term.
