OIL prices were little changed on Friday but headed for a weekly decline after U.S. President Donald Trump issued a sweeping plan to boost U.S. production and demanded OPEC lower crude prices.
Brent crude futures were down 9 cents at $78.20 a barrel by 0445 GMT on Friday, while U.S. West Texas Intermediate crude (WTI) dipped 9 cents to $74.53.
For the week, Brent was down 3.18% so far, while WTI shed 4.28%.
“Crude prices have been easing all through this week, as investors trimmed war premiums after the Gaza ceasefire while bracing for Trump’s energy policy change,” said Priyanka Sachdeva, senior market analyst at Phillip Nova.
Specifically, the latest drop came after Trump’s speech at the World Economic Forum in Davos, where he called on OPEC and Saudi Arabia specifically to lower oil prices.
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“If the price came down, the Russia-Ukraine war would end immediately. Right now, the price is high enough that that war will continue – you got to bring down the oil price,” Trump said during his speech. “They should have done it long ago. They’re very responsible, actually, to a certain extent, for what’s taking place,” Trump added.
“More potential downward choppy movement in the oil market in the near term due to the Trump administration’s lack of clarity on trade tariffs policy and impending higher oil supplies from the U.S.,” OANDA senior market analyst Kelvin Wong said in comments on Trump’s speech, as quoted by Reuters.
While it is quite uncertain whether OPEC will heed Trump’s call and start pumping more oil immediately, traders reacted quickly, reversing a bullish trend in the oil market that started at the end of last year. On Thursday, Brent crude and West Texas Intermediate fell by more than 1%, with Brent crude trading at $78.23 per barrel at the time of writing and WTI at $74.55 per barrel.
Besides the reaction to Trump’s calls to OPEC, traders appear to be quite certain that his energy policies will lead to significantly higher U.S. oil production, even as some analysts have expressed doubts this would be the case—along with the industry itself.
Oil drillers have repeatedly signaled they have no immediate plans to boost output in any considerable way, sticking instead with fiscal discipline and shareholder returns as a top priority. Still, the market has reacted in a rather primal way to Trump’s entry into office, taking his plans for a done deal already.
