By Scott DiSavino
(Reuters) – Oil prices fell to their lowest level in a week on Wednesday as the market considered how tariffs proposed by U.S. President Donald Trump could affect global economic growth and energy demand.
Futures fell 29 cents, or 0.4%, to settle at $79.00 a barrel, while U.S. West Texas Intermediate (WTI) crude traded down 39 cents, or 0. 5%, down to $75.44.
This puts Brent down for a fifth consecutive day for the first time since September and WTI for a fourth consecutive day for the first time since November. Both crude benchmarks closed at their lowest levels since January 9 for a second consecutive day.
“Possible sanctions under the new Trump administration remain unclear, with potential tariffs linked to Canada and Mexico now appearing at the forefront of traders’ uncertainties,” analysts at energy consultancy Ritterbusch and Associates said in a note. .
Trump said his administration plans to impose a 10% tariff on goods imported from China on Feb. 1, the same day he previously said Mexico and Canada could face levies of around 25%.
He also promised tariffs on European imports, without providing further details, and threatened new tariffs against Russia if the country did not reach a deal to end its war in Ukraine.
“The oil market’s attention is slowly shifting away from US sanctions against Russia and towards President Trump’s potential trade policy,” ING analysts said, adding that the energy sector was under pressure with the growing threat of customs duties.
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 .
The US president also said his administration would “probably” stop buying oil from Venezuela, a member of the Organization of Petroleum Exporting Countries subject to US sanctions.
The United States imported about 200,000 barrels per day (bpd) of oil from Venezuela in the first 10 months of 2024, compared to an average of 100,000 bpd in 2023, according to the latest Energy data United States Information Administration (EIA).
Iran, another OPEC member under US sanctions, sent a conciliatory message to Western leaders in Davos on Wednesday, with a senior official denying it wanted nuclear weapons and offering discussions on opportunities.
Furthermore, Saudi Arabia’s crude oil exports reached their highest level in eight months in November.
THE WITHDRAWAL OF AMERICAN CRUDE IS EXPANDING
Analysts forecast that stocks fell by about 1.6 million barrels last week, ahead of data expected Wednesday from the American Petroleum Institute (API) and the U.S. Energy Information Administration on Thursday. [EIA/S] [API/S]
Both weekly reports were delayed a day due to the Martin Luther King Jr. U.S. holiday on Monday.
If accurate, this would be the first time energy companies have withdrawn oil from storage for nine consecutive weeks since January 2018, when they withdrew oil for a record 10 consecutive weeks. This compares to a decrease of 9.2 million barrels during the same week last year and an average decline of 800,000 barrels over the past five years (2020-2024).
Separately, several Texas ports began resuming operations Wednesday after Winter Storm Enzo disrupted energy and shipping operations earlier this week.
