By Scott DiSavino
(Reuters) – Oil prices held near a one-week low on Wednesday as the market considers how U.S. President Donald Trump’s proposed tariffs could affect global economic growth and demand for energy.
Brent futures fell 19 cents, or 0.2%, to $79.10 a barrel by 11:04 a.m. EST (1604 GMT), while U.S. West Texas Intermediate (WTI) crude was 25 cents, or 0.3% lower, at $75.58.
That puts Brent down for a fifth day in a row for the first time since September and WTI down for a fourth day in a row for the first time since November. Both crude benchmarks were on track for their lowest closes since Jan. 9.
“As more details emerge regarding energy production and trade agreements, traders will assess the balance between economic growth, energy security, and policy risks,” said Dilin Wu, research strategist at Pepperstone.
Trump said his administration was discussing imposing a 10% tariff on goods imported from China on Feb. 1, the same day that he previously said Mexico and Canada could face levies of around 25%.
He also vowed duties on European imports, without providing further detail.
“The oil market’s attention is slowly turning away from U.S. sanctions against Russia towards President Trump’s potential trade policy,” said ING analysts, adding that the energy complex has come under pressure with the growing threat of tariffs.
In Europe, French President Emmanuel Macron and German Chancellor Olaf Scholz sought to project unity at a meeting in Paris, as Europe struggles to respond with one voice to threats of tariffs from the United States.
One factor that should limit a decline in crude price was the U.S. dollar, which slid to a one-month low against a basket of other currencies as Trump’s plans for tariffs kept financial markets guessing.
A weaker U.S. currency could increase demand for energy by making dollar-priced commodities like oil less expensive for buyers using other currencies.
The U.S. president also said his administration would “probably” stop buying oil from Venezuela, a member of the Organization of the Petroleum Exporting Countries (OPEC) under U.S. sanctions.
The U.S. imported about 200,000 barrels per day (bpd) of oil from Venezuela during the first 10 months of 2024, up from an average of 100,000 bpd in 2023, according to the latest data from the U.S. Energy Information Administration (EIA).
Iran, another OPEC member under U.S. sanctions, is “pressing the gas pedal” on its enrichment of uranium to near weapons grade, U.N. nuclear watchdog chief Rafael Grossi said, adding that Iran’s recently announced acceleration in enrichment was starting to take effect.
In other OPEC news, Saudi Arabia’s crude oil exports in November jumped to their highest in eight months.
US OIL INVENTORIES
U.S. oil storage data is due from the American Petroleum Institute (API) trade group later on Wednesday and the U.S. Energy Information Administration on Thursday.
Those reports were delayed by a day due to the U.S. Martin Luther King Jr. Day holiday on Monday.
Analysts projected U.S. energy firms pulled about 1.2 million barrels of crude from storage during the week ended Jan. 17. [EIA/S] [API/S]
If correct, that would be the first time energy firms pulled oil out of storage for nine weeks in a row since January 2018 when they withdrew oil for a record 10 weeks in a row. That compares with a decrease of 9.2 million barrels in the same week last year and an average decrease of 0.8 million barrels over the past five years (2020-2024).
This post is originally published on INVESTING.
