OIL: Oil Down for First Weekly Loss this Year Thanks to Trump.
Jan-24 04:20
- During his first term in office, President Trump employed a line of attack on Saudi Arabia and OPEC+ aimed at driving down the price of oil.
- Yesterday he restarted that approach stating clearly “I am going to ask Saudi Arabia and OPEC+ to bring down the cost of oil,” whilst addressing the gathering of world leaders at Davos.
- OPEC+ has been holding back on supply to support prices as new sources of oil hit markets globally that are outside OPEC+ control.
- It is estimated that there is 1 million plus spare daily capacity available that could be released.
- The comments naturally had the immediate effect on prices with WTI falling from an intra-day high of US$76 bbl to open the trading day in Asia at $74.26 where it pared back some of those losses to reach $74.55.
- For the week, WTI is on track to finish over 4% lower.
- Brent followed a similar pattern having peaked at US$79.60 bbl it opened the Asian trading day at $77.86 rising marginally to $78.23.
- For the week Brent is on track to finish over 3% lower.
- This week Trump’s comments on potential tariffs have impacted most markets in different ways and with Canada in his sights for some of the first tariffs, there is evidence that exporters are trying to get ahead of that.
- US imports of Canadian oil are running at a record with the possibility of tariffs seeing more oil being pumped to US refineries.
- Crude inventories however declined for the ninth week straight and are now at their lowest level since early 2022.
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