Oil prices experienced a decline on Friday and were on track for weekly losses as U.S. President Donald Trump advocated for reduced crude prices and increased energy production within the United States. The markets remained nervous about Trump’s proposed trade tariffs against major economies, which could potentially disrupt global commerce and negatively impact oil demand.
Brent oil futures set to expire in March fell 0.6 percent to $77.82 per barrel, while West Texas Intermediate crude futures dropped 0.6 percent to $74.21 per barrel by 20:32 ET (01:32 GMT). Both contracts were down between 3.6 percent and 4.8 percent for the week, marking their worst performance since November.
Oil prices impacted by Trump energy policies
Oil prices faced significant pressure primarily due to Trump’s call for heightened energy production in the U.S., with the President declaring a national emergency regarding the issue. Trump signed an executive order aimed at boosting U.S. oil output while simultaneously easing certain climate-related restrictions on the energy sector. On Thursday, Trump urged Saudi Arabia and the Organization of Petroleum Exporting Countries to lower oil prices, triggering additional losses in crude markets.
The President’s push for lower oil prices appears to be motivated by his desire to reduce U.S. inflation—an outcome that could be beneficial for the economy in the long term. However, his requests for lower prices are likely to provoke a mixed reaction from the energy industry, as reduced prices can erode profit margins. Such lower prices also complicate the potential for increased investment in the energy sector, which Trump has been vocal about promoting.
Read more: Oil prices fall 0.3 percent to $78.8 amid Trump policies, U.S. production concerns
China PMIs and Federal Reserve in focus
Oil markets are now looking forward to key Chinese purchasing managers index data for January, scheduled for release next week, as they seek further insights from the world’s largest oil importer. Attention will be directed toward whether the momentum in the Chinese economy has continued from the fourth quarter, especially following a series of substantial stimulus measures from Beijing.
Additionally, China’s Lunar New Year holiday begins next week, signaling an uptick in fuel demand across the country due to travel. Beyond China, the focus will also be on a Federal Reserve meeting next week, where the central bank is widely anticipated to maintain steady interest rates after a cumulative cut of 1 percent through 2024.
