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WTI upside limited as Trump demands OPEC lower crude prices

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West Texas Intermediate (WTI) halted its six-day losing streak, trading around $74.40 a barrel during Asian hours on Friday.

Crude oil prices are on track for a weekly decline after President Donald Trump announced a comprehensive plan to increase US production and called on OPEC to lower crude oil prices.

In a speech delivered Thursday at the World Economic Forum in Davos, President Trump urged OPEC and its leading member, Saudi Arabia, to reduce the cost of crude oil, according to Reuters.

Oil prices got upward support from Trump’s remarks expressing a desire for the Federal Reserve to lower interest rates without delay.

“With oil prices falling, I’ll demand that interest rates be cut immediately, and they should be reduced worldwide,” he said in Davos. Lower borrowing costs would likely improve economic conditions in the US, hence, supporting the demand for crude oil.

Additionally, oil demand may have increased following Trump’s comments expressing a preference to avoid tariffs on China, the world’s largest oil importer.

The US president voiced optimism about a potential trade deal with China after speaking with President Xi Jinping on Thursday, signaling possible progress in US-China trade negotiations.

Meanwhile, the Energy Information Administration (EIA) weekly report showed that crude oil stockpiles in the US for the week ending January 17 fell by 1.017 mln barrels. This marked a smaller decline compared to the previous drop of 1.962 mln barrels and fell less than the market consensus, which had anticipated a 2.1 mln barrel decrease.

(Source: OANDA)