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WTI Oil Prices Dip Amid Trump’s OPEC Comments and U.S. Production Surge

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icon 24/01/25
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WTI Oil Prices Dip Amid Trump’s OPEC Comments and U.S. Production Surge

West Texas Intermediate (WTI), the benchmark for U.S. crude oil, experienced a decline to approximately $74.10 in early trading on Friday. This drop was influenced by recent comments from former President Donald Trump, who indicated his intention to request that Saudi Arabia and the Organization of the Petroleum Exporting Countries (OPEC) reduce oil prices.

Trump’s remarks have added a layer of uncertainty regarding future pricing for WTI. While addressing an audience at the World Economic Forum in Davos, he made a clear statement about his expectation for OPEC to lower oil costs. This stance raises concerns among traders about potential tariffs and energy policies that might impact market dynamics.

Further complicating the WTI outlook is the anticipation of increased U.S. oil production. Under Trump’s administration, a national energy emergency was declared, allowing for expedited approval of various energy projects that would typically require lengthy permitting processes. This potential surge in production may exert additional downward pressure on WTI prices in the near future.

In the context of supply, U.S. crude oil inventories have continued to decline, marking the ninth consecutive week of falling stock levels. According to the latest report from the Energy Information Administration (EIA), U.S. crude inventories decreased by 1.017 million barrels in the week ending January 17. This decline follows a previous drop of 1.962 million barrels, although the latest figures fell short of the market consensus, which anticipated a reduction of 2.1 million barrels.

Traders are likely to remain vigilant regarding Trump’s policy pronouncements in the coming days. In addition, the preliminary reading of the U.S. S&P Global Purchasing Managers Index (PMI) for January is set to be released later today. A disappointing outcome from this report could weaken the U.S. dollar, potentially offering some support to the prices of U.S. dollar-denominated commodities like oil.

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