US crude stockpiles fall by 1 million barrels. Trump’s plans to boost US production continue to weigh on the market. Tariffs could weigh on global demand growth.
Oil prices were little changed on Friday but headed for a weekly decline after US President Donald Trump released a comprehensive plan to boost US production and demanded that OPEC cut crude prices.
Brent crude futures were down 9 cents to $78.20 a barrel by 0445 GMT on Friday, while WTI crude was down 9 cents to $74.53.
Brent fell 3.18% for the week, while WTI fell 4.28%.
For now, Trump is being predictably unpredictable, setting oil prices up for headline-grabbing volatility ahead. Crude prices have fallen throughout the week as investors prepare for Trump’s energy policy shift following the Gaza ceasefire.
Trump declared a national energy emergency on Monday and rolled back internal restrictions on energy infrastructure as part of a plan to maximize domestic oil and gas production.
He vowed to impose tariffs on the European Union and 25% tariffs on Canada and Mexico and said his administration was considering imposing a 10% punitive tariff on China.
Speaking at the World Economic Forum in Davos, Switzerland, on Thursday, Trump said he would demand that the Organization of the Petroleum Exporting Countries and its de facto leader, Saudi Arabia, lower crude prices. He also said he would ask Riyadh to push through a U.S. investment package worth $600 billion to $1 trillion.
As attention shifts to a possible February timetable for new tariffs set by Trump, market caution is likely to persist because new trade restrictions could have negative consequences for global growth and potentially hurt oil demand prospects.
Despite bullish catalysts such as a significant decline in U.S. crude oil inventories providing temporary positive ripples, the possibility of a generally oversupplied global market and worst-case scenarios related to Chinese demand continue to weigh on crude oil futures.
According to the U.S. Energy Information Administration (EIA), U.S. crude oil inventories last week reached their lowest level since March 2022.
The EIA report, which was released a day late due to a holiday in the U.S. on Monday, said that crude oil inventories fell by 1 million barrels in the week ending Jan. 17 to 411.7 million barrels, marking the ninth consecutive weekly decline.