By Arathy Somasekhar
HOUSTON (Reuters) -Oil prices settled lower on Monday after U.S. President Donald Trump was sworn in for a second time, and said he would immediately declare a national energy emergency, promising to fill up strategic reserves and export American energy all over the world.
Brent crude futures closed down by 64 cents, or 0.8%, at $80.15 in early settlement due to the U.S. Martin Luther King Jr. Day holiday.
U.S. West Texas Intermediate crude futures were down by $1.30, or 1.7%, at $76.58. The more active WTI crude March contract was down 91 cents, or 1.2%, at $76.48. There will be no settlement for WTI contracts due to the U.S. holiday.
A Trump official speaking earlier in the day did not provide details on the national emergency, but Trump and his allies have signaled they would use the authority to rapidly approve new oil, gas, and electricity projects that typically take years to permit.
Trump, who vowed during his election campaign to “drill, baby, drill,” will also sign an executive order focused on Alaska, the official said, adding that the state was critical to U.S. national security and could allow shipments of liquefied natural gas to other parts of the United States and to allied countries.
He also said in his inaugural speech that he would impose tariffs and tax countries, and promised an overhaul of the trade system.
The focus is on what executive orders Trump will sign over the next 24 hours, said UBS analyst Giovanni Staunovo.
Trump is also expected to make policy announcements that include an end to a moratorium on LNG export licences as part of a wider strategy to strengthen the economy.
The Brent and WTI benchmarks advanced more than 1% last week for a fourth-consecutive weekly gain after the Biden administration imposed sanctions on more than 100 tankers and two Russian oil producers.
That led to a scramble by top buyers China and India for prompt oil cargoes and a rush for ship supply, as dealers of Russian and Iranian oil sought tankers not under sanctions for oil shipment.
While the new sanctions could cut supply from Russia by nearly 1 million barrels per day, recent price gains could be short-lived depending on Trump’s actions, ANZ analysts said in a client note.
Trump has promised to help to end the Russia-Ukraine war quickly, which could involve relaxing some curbs to enable an accord, they said.
Russian President Vladimir Putin congratulated Trump on taking office hours before Trump’s inauguration in Washington and said he was open to dialogue with the new U.S. administration on Ukraine and nuclear arms.
Easing tension in the Middle East also kept a lid on oil prices. Hamas and Israel exchanged hostages and prisoners on Sunday that marked the first day of a ceasefire after 15 months of war.
Yemen’s Houthis will target only Israel-linked vessels following the Gaza ceasefire, the Sanaa-based Humanitarian Operations Coordination Center said.
This post is originally published on INVESTING.
