WTI tries to recover but faces oversupply and trade trensions
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West Texas Intermediate (WTI) crude oil prices are trying to recover, hovering around $70.80 per barrel after four consecutive losing sessions. despite the attempt to regain ground, the market remains set for a third straight weekly decline, weighed down by rising u.s. crude inventories, geopolitical risks, and evolving trade policies.
Trump’s energy strategy adds pressure on oil prices
U.S. President Donald Trump reaffirmed his commitment to boost domestic oil production, reinforcing expectations of persistent oversupply. his administration aims to drive prices lower by expanding output, further pressuring global crude markets already struggling with high inventories.
U.S. crude stockpiles surge, signaling weaker demand
The latest data from the energy information administration (eia) revealed an 8.66 million-barrel increase in u.s. crude inventories for the week ending january 31, 2025. this marks the largest weekly build in nearly a year, significantly exceeding market expectations of a 2.6 million-barrel rise. the unexpected surge in gasoline stockpiles further signals weakening demand, compounding the bearish outlook for oil.
U.S.-China trade war escalates, weighing on sentiment
Geopolitical tensions added further uncertainty after china imposed tariffs on u.s. oil, lng, and coal in response to trump’s recent trade measures. while china’s imports of u.s. energy products remain relatively low, the move stoked fears of an extended trade conflict, which could disrupt global supply chains. despite this, there are hopes for potential tariff rollbacks as trump and xi jinping plan to discuss trade terms, according to reuters.
Saudi aramco price hikes and iran sanctions provide support
On the supply side, saudi aramco raised its official selling price for crude, reflecting strong demand from china and india. additional upward pressure on prices comes from u.s. sanctions on russian crude exports, which have further constrained supply. moreover, trump’s renewed push to eliminate iranian oil exports could remove up to 1.5 million barrels per day from the market, adding to concerns over supply disruptions in the middle east.
Outlook: volatility remains as markets assess supply and demand risks
With a complex mix of rising inventories, geopolitical developments, and trade uncertainties, oil market volatility is likely to persist. while the possibility of trade negotiations offers some relief, concerns over a prolonged oversupply scenario and unpredictable policy shifts will keep traders on edge.
Trump’s energy strategy adds pressure on oil prices
U.S. President Donald Trump reaffirmed his commitment to boost domestic oil production, reinforcing expectations of persistent oversupply. his administration aims to drive prices lower by expanding output, further pressuring global crude markets already struggling with high inventories.
U.S. crude stockpiles surge, signaling weaker demand
The latest data from the energy information administration (eia) revealed an 8.66 million-barrel increase in u.s. crude inventories for the week ending january 31, 2025. this marks the largest weekly build in nearly a year, significantly exceeding market expectations of a 2.6 million-barrel rise. the unexpected surge in gasoline stockpiles further signals weakening demand, compounding the bearish outlook for oil.
U.S.-China trade war escalates, weighing on sentiment
Geopolitical tensions added further uncertainty after china imposed tariffs on u.s. oil, lng, and coal in response to trump’s recent trade measures. while china’s imports of u.s. energy products remain relatively low, the move stoked fears of an extended trade conflict, which could disrupt global supply chains. despite this, there are hopes for potential tariff rollbacks as trump and xi jinping plan to discuss trade terms, according to reuters.
Saudi aramco price hikes and iran sanctions provide support
On the supply side, saudi aramco raised its official selling price for crude, reflecting strong demand from china and india. additional upward pressure on prices comes from u.s. sanctions on russian crude exports, which have further constrained supply. moreover, trump’s renewed push to eliminate iranian oil exports could remove up to 1.5 million barrels per day from the market, adding to concerns over supply disruptions in the middle east.
Outlook: volatility remains as markets assess supply and demand risks
With a complex mix of rising inventories, geopolitical developments, and trade uncertainties, oil market volatility is likely to persist. while the possibility of trade negotiations offers some relief, concerns over a prolonged oversupply scenario and unpredictable policy shifts will keep traders on edge.