By Scott DiSavino
(Reuters) – Oil prices fell to a one-week low on Wednesday as the market considered how US President Donald Trump's proposed tariffs could affect global economic growth and energy demand.
Futures fell 29 cents, or 0.4%, to settle at 79.00 a barrel, while US West Texas Intermediate crude (WTI) traded 39 cents, or 0.5%, lower to settle at $75.44.
That puts Brent down for the fifth day in a row for the first time since September and WTI down for the fourth day in a row for the first time since November. Both crude benchmarks closed lower from Jan. 9 for the second day in a row.
“Potential sanctions under the new Trump administration remain unclear, and potential tariffs related to Canada and Mexico now appear to be at the forefront of traders' uncertainty,” analysts at energy consulting firm Ritterbusch and Associates said in a note.
Trump said his administration was considering imposing a 10% tariff on goods from China on February 1, on the same day he had previously said Mexico and Canada could face tariffs of up to 25%.
He also pledged the European import duties, without providing more details and threatened new tariffs against Russia if the country does not make an agreement to end the war in Ukraine.
“The attention of the oil industry is gradually turning to the US sanctions against Russia in the trade policy that President Trump may have,” said ING analysts, adding that the energy complex has come under pressure and the threat of rising prices.
In Europe, French President Emmanuel Macron and German Chancellor Olaf Scholz sought to produce unity at a meeting in Paris, as Europe tries to respond unanimously to tax threats from the United States.
The US president also said his administration will “probably” stop buying oil from Venezuela, a member of the Organization of the Petroleum Exporting Countries under US sanctions.
The US is importing about 200,000 barrels per day (bpd) of oil from Venezuela during the first 10 months of 2024, up from an average of 100,000 bpd in 2023, according to the latest data from the US Energy Information Administration (EIA).
Iran, another OPEC member under US sanctions, delivered a conciliatory message to Western leaders in Davos on Wednesday, with a senior official denying it is seeking nuclear weapons and offering talks about the possibility.
In other OPEC news, Saudi Arabia's crude oil exports rose to an eight-month high in November.
US UNGRAPHIC EVENTS SEEMING EXPANSION
Analysts estimated that stockpiles fell by about 1.6 million barrels last week, ahead of data from the trade group American Petroleum Institute (API) later on Wednesday and the US Energy Information Administration on Thursday. (EIA/S) (API/S)
Both weekly reports were delayed by a day due to US Martin Luther King Jr. Day holiday on Monday.
If correct, that would be the first time energy firms have withdrawn oil from storage for nine consecutive weeks since January 2018 when they withdrew oil for 10 consecutive weeks. That compares to a drop of 9.2 million barrels in the same week last year and an average of 800,000-barrel withdrawals over the past five years (2020-2024).
In contrast, several Texas ports began operating Wednesday after Winter Storm Enzo disrupted power and shipping operations earlier this week.