Oil prices fell in Asian trade on Friday and were headed for weekly declines as U.S. President Donald Trump called for lower crude prices and higher energy production in the U.S.
Oil battered by Trump energy policies
Oil prices were dented chiefly by Trump calling for increased energy production in the U.S., with the President declaring a national emergency over the matter. Trump signed an executive order calling for increased U.S. oil production, while also scaling back certain climate-related restrictions on the energy sector.
Trump on Thursday called on Saudi Arabia and the Organization of Petroleum Exporting Countries to lower oil prices, sparking further losses in crude markets. The President’s agenda of lower oil prices is likely driven by his intention to bring down U.S. inflation, a scenario that does not bode well for the economy in the long run.
But his calls for lower oil prices will likely elicit a mixed response from the energy industry, given that lower prices dent margins. Lower prices also complicate the prospect of increased investment in the energy sector, which Trump has been clamoring for.
China PMIs, Fed in focus
Oil markets are now awaiting key Chinese data for January, due next week, for more cues on the world’s biggest oil importer. Focus will be on whether momentum in the Chinese economy carried over from the fourth quarter, following a string of major stimulus measures from Beijing.
China’s Lunar New Year holiday also begins next week, heralding increased fuel demand in the country for travel. Beyond China, focus is also on a Fed interest rate decision next week, where the central bank is widely expected to keep interest rates steady after cutting them by 1% through 2024.
Brent and West Texas Intermediate crude futures both fell 0.6% to $77.82 a barrel and $74.21 a barrel respectively by 20:32 ET (01:32 GMT). Both contracts were trading down between 3.6% and 4.8% for the week, their worst performance since November.