LONDON: Oil prices edged up on Friday but remained on track for a weekly decline after US President Donald Trump announced sweeping plans to boost US production and demanded that OPEC move to lower crude prices.
Brent crude futures gained 25 cents, or 0.3 percent, to $78.54 a barrel by 2:47 p.m. Saudi time GMT while US West Texas Intermediate crude was up 22 cents, or 0.3 percent, at $74.84.
Over the week Brent has lost nearly 3 percent while WTI is down close to 4 percent.
“After a week of Trump being in office, the various executive orders are not being disruptive to oil supplies. Most of what he has done has been with an inward domestic focus,” said Harry Tchilinguiran at Onyx Capital Group.
“We were looking for pronouncements around tariffs, around Iran, Venezuela and Russia.”
Ahead of Trump’s inauguration the market had built up a net long position in oil futures to hedge against price gains arising from supply disruption, but this has now started to unwind, Tchilinguiran said.
Trump, during his speech on Thursday at the World Economic Forum in Davos, Switzerland, said he would demand that the Organization of the Petroleum Exporting Countries bring down the cost of crude barrels.
He also said he would ask Saudi Arabia to increase a US investment package to $1 trillion, up from $600 billion reported by the Kingdom’s state news agency earlier in the day.
“I don’t really expect OPEC will change policy unless there is a change in fundamentals,” said UBS commodities analyst Giovanni Staunovo. “Markets will be relatively muted until we get more clarity on sanctions policy and tariffs.”
Trump had declared a national energy emergency on Monday, rolling back environmental restrictions on energy infrastructure as part of a sweeping plan to maximize domestic oil and gas production.
On Wednesday, he vowed to hit the EU with tariffs and impose 25 percent tariffs against Canada and Mexico, and said his administration was considering a 10 percent punitive duty on China.
As attention shifts to a possible February timeline for new tariffs set by Trump, caution will likely persist in the market as any new trade restrictions will carry negative implications for global growth, potentially weighing on oil demand prospects, said Yeap Jun Rong, market strategist at IG.
Traders expect oil prices to range between $76.50 and $78 a barrel, Yeap added.
While bullish catalysts like a significant drawdown in US crude stocks are providing temporary positive swings, an overall oversupplied global market and ailing projections of Chinese demand continue to weigh on crude futures, Phillip Nova’s Sachdeva said.
US crude inventories last week hit their lowest level since March 2022, according to the US Energy Information Administration.
The EIA report, issued a day late because of a US holiday on Monday, said crude stockpiles fell by 1 million barrels to 411.7 million barrels in the week to Jan. 17, marking a ninth consecutive weekly decline.
