Crude Oil price fell on Tuesday after U.S. President Donald Trump declared a national energy emergency on his first day in office, raising concerns of higher U.S. output in a market widely expected to be oversupplied this year.
Brent crude futures LCOc1 settled down 86 cents, or 1.1%, at $79.29 per barrel. U.S. West Texas Intermediate crude futures (WTI) for February delivery CLc1 fell by $1.99, or 2.6%, to $75.89 in its final trading session. MCX Crude oil price settled down by 0.74% to 6564.00.
More-actively traded March WTI contract CLc2 fell 2% to settle at $75.83 a barrel. There was no settlement in the U.S. market on Monday due to a public holiday.
The oil market is expected to be oversupplied this year, after weak economic activity and energy transition efforts weighed heavily on demand in top-consuming nations the United States and China.
The U.S. Energy Information Administration (EIA) reiterated on Tuesday its expectations for oil prices to decline both this year and next.
Trump also said he was thinking of imposing 25% tariffs on imports from Canada and Mexico from Feb. 1, rather than on his first day in office as previously promised.
The delay helped ease concerns of an immediate tightening of the market among U.S. refiners, many of which are geared to process the type of crude oil supplied by these countries.
Oil’s losses were also limited after the U.S. president said his administration would “probably” stop buying oil from Venezuela. The U.S. is the second-biggest buyer of Venezuelan oil after China.
Trump also promised to refill strategic reserves, although analysts questioned whether that would make any changes to oil demand.
Adding to this, The U.S. dollar alternated between gains and losses on Tuesday in a choppy session, as markets grappled with uncertainty surrounding any tariffs President Donald Trump may implement.
Trump told reporters he was thinking about implementing tariffs of around 25% on imports from Canada and Mexico as of Feb. 1 over fentanyl crossing into the country and migrants entering illegally. He also raised the possibility of a universal tariff but said the U.S. was not ready for that yet.
The dollar rose as much as 0.68% earlier in the session as the greenback attempted to bounce back from a sharp decline on Monday. An strength in the dollar could weight on the prices.
Crude oil prices retreated from last week’s peak of 6958, making a low of 6514 and settling at 6578, down 0.78%.
The technical chart indicates that prices are struggling to surpass the significant resistance at 6980, with pressure building around this level. The recent decline suggests that prices may soon test the immediate support at 6480. However, a decisive break below this level could extend the fall toward 6350–6280.
On the other hand, if support holds, a slight recovery toward 6675–6790 is possible.
The overall trend is expected to remain volatile amid Trump’s actions and their impact on market sentiment. Stay cautious.
Until then, Happy Trading!
Commodity Samachar Securities
We Decode the Language of the Markets
Also Read: Trump Surprising Moves Amid a Quiet Data Week , China’s Energy Shift: Crude Oil Drops, Gas Demand Soars
Recommended Read: 2024 G20 Summit: Did It Deliver on Market Expectations?
Want Help On Your Trades ?
Chat with RM