NEW YORK: Oil fell more than 1% on Thursday after U.S. President Donald Trump urged Saudi Arabia and OPEC to bring down its cost during his address at the World Economic Forum.
Uncertainty over how proposed tariffs and energy policies would affect global economic growth and energy demand also weighed on prices.
Brent crude futures were down 90 cents, or 1.14%, at $78.1 a barrel by 11:40 a.m. EST (1640 GMT). U.S. West Texas Intermediate crude (WTI) fell $1.01, or 1.34%, to $74.43.
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Prices dipped after Trump announced he would be asking Saudi Arabia and OPEC to bring down the cost of oil during his speech at the World Economic Forum in Davos, Switzerland.
The broader economic implications of U.S. tariffs could further dampen global oil demand growth, said Priyanka Sachdeva, senior market analyst at brokerage Phillip Nova.
Trump has said he would add new tariffs to his sanctions threat against Russia if the country does not make a deal to end its war in Ukraine.
He also vowed to hit the European Union with tariffs and impose 25% tariffs against Canada and Mexico. On China, Trump said his administration was discussing a 10% punitive duty because fentanyl is being sent from there to the U.S.
On Monday he declared a national energy emergency intended to provide him with the authority to reduce environmental restrictions on energy infrastructure and projects and ease permitting for new transmission and pipeline infrastructure.
There will be “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 an email.
On the U.S. oil inventory front, crude stocks rose by 958,000 barrels in the week ended Jan. 17, according to sources citing American Petroleum Institute figures on Wednesday.
Gasoline inventories rose by 3.23 million barrels and distillate stocks climbed by 1.88 million barrels, they said.
Data from the U.S. Energy Information Administration is due at 12 p.m. EST on Thursday.
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